Appendix — Hawaii v. Standard Oil Co. of Cal.

Supreme Court brief1972

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APPENDIX.

Bn the Supreme Court.

= \: pw

ae eg, | Auited States

| OcroBer TERM, 1970 , ee

: Pa . | 3 —_—_ \ .

: < . No. 1060 .

a _ | Srare.or Hawan, Petitioner, .

Sranparp, On Company oF CantrorN1, 4, Umiox | On

| __ Company. or_Catrrornia, SHELL O On Company

{| =e and CHEvRon AsPHALT Company,

eats Respondents. : ee

On Writ of Gertiorari to the United States Court of Appens |

. . for the Ninth Circuit )

i. Petition for Certiorari Filed December 5, 1970

| Certiorari Granted March 1, 1971

. 3

Relevant: . dovlay, entzies in the shinidinas Nilee avi kcces.

: & - Documents filed in the United States Distriet Court for the

. District of Hawaii:

"INDEX

Complaint (April 1, prone carer att:

Third Amended Complaint (Sept. 6, >. | ee

Notice of Motion and .Motion- of ‘Defendants Standard

Oil Company of f California and Chevron Asphalt Com-.

' pany for an-Order Dismissing Counts Two and Three _

_of Phird Amended Complaint (Oct. 14, 1968)....<...

“Motion to Strike Certain Allegations of Count One. and .

to Dismiss Count Two and. Count Three of the Third

Amended Complaint (Oct. MOOR) 55 os esse. ae

Affidavit of D. ‘Campbell Ross: . ree , Seiekkinteaseeedeo

- Motion. of Defendant Union: Oil Ciiaie of California.

. @€o Dismiss or Strike Count One and to Dismiss Counts ©

Two and Three of the Third Amended — and

| int the Alternative to Strike (Oct. 15, 1968)......1..

Excerpts from Reporter’ s Transcript Dated December 13,

1968 ../..... NEG Pe Tee Me a TERR ee

Mem: duh Decision on Defendants? Motions to Dis

or Alternatively to Strike ©ertain Allegations of

fount: One and to Dismiss Count Two and” Count

Three of the Third _Amended Complaint (Feb. a,

eee Bi Fa ee: PANES BS ee.

‘Fourth Amended Complaint (Feb. 27, 1960). ike 5 ar _

_ Stipulation (March 19,-1069).......00.c00hede des dees

Excerpts from. Reporter's Transcript Dated May 29, .

MN kos caesar henry a recees ees

Decision” on Plaintiff’s Parens Patriae Coit (July: 1

EMOUD) pisccccccreccedeactarcvecvaseeTenchededesses fe

Order and Certification for Interlocutory Appeal Under

Section 1292(b) of Title 28 of the United States Code

(July 2, WOOD) oie epics pagccwceerecesss se ealeceeees

Certificate of Clerk (Sept. 4, 1969) ..... 0.2...

"Opinion of the United States Court of Appeals for the

Ninth Cireuit (Sept. 25, 1970) ..... Se tsbake ls sete iwads 100 |

Judgment of the United States Court of. Appeals for the

Ninth Circuit (Sept. 25, 1970)...... eee eee oe

‘Supreme Court ‘of the United States’. Order Granting Cer-

tiorari (Mareh 2, 1971) Mev ceseeaea iiaesscadecesieteees +

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' Jan. piiiee 25 Soin Briefs.

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— RELEVANT DOOKR TN otk

ee Romany amere |

"plied ates ‘Ooops of ‘gpoate:

te a / 7 For the Ninth Cireuit

1969

| July 28-Filed Order (E Ca) Granting Permission to Ap

_peal under §1292(b). -(Glerk’s* Fe: ‘Appellant. $25)

Docketed® cause. and enterédy appearances of ‘cotinsel.

‘Sept, 8—Filed Cert Transe of B, ord on Avpedt, in tve

yolumes; Vol.I, Pleadings; ols II-V, _ 8 weton,

orig and 1 copy. “4

Hor. Pied two add’l copies of Vol K of" Regord :

Clerk’s Fee: 84 Pp ( Clerk’s: Fee: AppeHant $5.00).

Bee. 24—Lodged: 4 copies of: Applts. Document re: motion

and brief. in the ‘matter of State of Georgia v vs. Penn.

sylvania RR Co as filed in SC. - es

‘ we So

, “ me ;

1970

to Calif Atty- Genl- office—for 2 days. rtd 1/14/70.

. Jan. 26—Received: letter of San. 23/70 from counsel Kirk:

ham (Pillsbury, Madison & Sutro) re Philadelphia

Housing Autherity now reported at par. ‘73018 of

- CCH Trade Regulation Reports,

Ge . ,

‘

Jan. 12—Loaned copy of 5. vol. record’ and oppli’s ticket, ‘

nd 2 ”» a |

, “ . . 2. : ; :

e . vis “re . . :

\. i . . : . °. . Pp

Jan. 26—Filed Orig and 24 Amicus Curiae Brief of a

State of Calif. . NO

‘Filed Motion and Order (C) oxen time to file =

ca spilt reply brief to Feb 23, 70... | |

Calendared 45

“in " eoly to Appellee, and Amicus Brief of the State

"of California . He +” ; :

—Standard Oil, Shell Oil and Chevron Asphalt

-—Standard Oil, Shell Oil and Chevron ‘Asphalt

in reply to brief of California. as Amious Curiae. |

Maret 25—Recvd. letier of 8/24. from applts re: add'l ar-

- . gument.time (panel). a

April 7€Reevd. directive (WBL) advising counsel

court will allow 45 minutes for each side: to argue.

April 7—Filed order (M) granting req for add’l time.

April 15—Cause argued and submitted t@M. W. T.

_ Aug. 14—Red. ‘add'l authority on behalf of respondents’

(to M. W. Tr). So

"” Aug. 31—Reevd. letter of 8/27 from appellee counsel re:

add’l authority ( panel). ;

Sept. 25—Ordered opinion (Merrill) filed wal judgment te a

a. be filed and entdg;; _

Sept. 25—Filed opinion. Reversed and aaa

‘ Sept. 25—Filed and entered J Judgment. — —— - “we

Oct. 5—Filed orig and 3 — spplication for stay of

. mandate to M: ,

Oct 5—Filed snl ation and order. (M) oaymng judgment -°

to a a 5, 1970. |

| 3

: Oct. 7—Issued certified eopy of record to Ok, SC, tor

certiorari (Clerk’s Fee: Appellant $9.60).

“ Oct. 9—Filed orig and three of Oost Bill for applts Std -

Oil (attached to J udgment).: |

Oct. 9—Filed orig and 3 of Cost Bill for appits ‘Vaion

Oil Co (attached to Judgment).

Oct. 14—Filed orig and 9 -appellee’s motion for an aia as)

. tional stay of judgment to W.

Oct. 15—Filed - ‘appellee’s .application ( Wy) ext. staying

. judgment to December 5, 1970: .

Dee. 8—Recvd. notice from Clk, SC, re: fing: pet. for .

\ .

‘

cert SC#1060. on;

A. true copy _*

Attest. 3/8/71 - es ee

' Wm. B. Luck, Clerk 4% Pe

by /s/- Raymond D Heuret . ~~ ;

Resets | et Fe,

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. "United. States District. Court

District ee Hawaii 1

» ae - Civil No. mem

= : a he Se Title of Case . rn

Srare or Hawan, eee Oe +

° | | - - Plamtsf,

We. eet vee

Sranpary’ On: CoMPANY OF Canrroiinn,

; Union On Company oF CaLIrorNIA, e

oo ~ and SHei, Om-Coyrany, | _ a. 9

_and:CHvron AsPHaLt CoMPany, Riel t-25,

4 fie | | . Defendants.

5-24-68 . ce et oe ae

(amended comp.) | tg ¥”

Basis of action: Violation of the Clayton Ket Sec. 4816

Sections 11 & 13 Chapter 205A RLH

a . Attorneys |

For Plaintiff» © 7

Bert T. Kobayashi =

Attorney General | .

- State of Hawaii — 4

Joatish L. Alioto

Maxwell M. Blecher

Lawrence Alioto

111 Sutter St. S.F..

For ie:

| .Roy A. Vitousek, Jr. |

_ (Standard Oil.& Chevron Asphalt Co. ).

- William M. Swope tape 3 ze

(Shell OilCo.) Gite See ._ tee

“Frank D. Padgett. - _

(Union Oil Co. of Calif.) —<

Daniel H. Case |

"(Standard Oil Co. of Calif,

Date - Plaintiff’s Recount - a

Apr. 1i—Atty Gen. Hawaii - Received $15.00

19—Treas. U. S. Disbursed $15.00

. ao aw |S

¢ . 2 _

1968 ~

Apr. 1—Compiaint and Summon filed an og

Summons issued = ° 2-8

“Apr. 3—Return on Serial ot Writ fledserved Sei Oil

_ Co. of Calif.

Return on Service of. Writ led—served Union Oil

Co. of Calif. :

-? Return on Service of. Writ fledserved Shell Oil Co.

‘= 4—Pre-Trial Order No.1 filed . , Pence:

(Prélim PT set for May 13, 1968 @ 10 =e}

* ee to parties by registered mail

Apr. 8—Motion and Merhorandym for Pre-Trial Confer-

- ence Under: Rule 16 fil =

Apr. 19—Proposed Pre-trial der No. 2 and Agenda filed |

. - .

MF. .

. | os dpe. 29 Stipulation filed _ an .

= : May 7—Addendum to Agenda of Plaintiff's opose d Pre- ;

; . trial Order No. 2 filed ;

| May 10—Memorandum of Standard Oil. Company of Cali-

fornia in Response to Plaintiff ’s Proposed Pretrial -

Order No, 2 and Agenda filed

May 15—Memorandum of Shell Oil ays in Pestoues |

_ to Plaintiff’s Pretrial Conference Agenda ‘and Draft

Pretrial Order No. SZ filed .

May 17—Memorandum ‘For Défendant Union Oil Com- _—

pany of California in Response to Plaintiff’s Agenda

, - and Draft Pretrial Order No. 2 filed: . .

May 23—Entering proceedings—appearances by attor-.

neys—oral statements of the Issues Involved—P.T.O. _

No. ,2—Plaintiff’s motion to file” ‘an Amended Com- |

plaint— _ Pence. *¢

| May 24—Amended shite filed —

, June 7—Pre-Trial Order No.2 filed ————. » Penee-. == ~~

' (Hearing on Motions and i ta set for 7- =

2 = | @ 10:00.a.m.)

June 14--Plaintiff? s First set ot inereiooe to De-

fendants Propounded by Plaintiff Pursuant.to Rule

' 33 Federal Rules of Civil Procedure filed _

Motion to Produce Under Rule 34 filed

‘ Plaintiff s Second Set of Interrogatories to Defend-

ants filed

June 21—Reporter’s Transcript, Tharedey; May 23, 1968

filed (Cydney von Savoye, Reporter, U. a District

_— San seers California) :

- June 27—Motion of Shell Oil >mpany for Production of

| Documents, and Supportin Memorandum and Affi-

davit filed. . | : :

_ Motion of Shell Oil Biniieny to Strike Certain: Por-

tions of. Amended Complaint, and Memorandum in

. Support of Motion filed.

Interrogatories of Shell Oil Company filed —

" une 28—Notice of Motion and Motion of ‘Defendants

Standard Oil Company of. California and Chevron

Asphalt Company for an. Order Dismissing Count

Two of the Amended. Complaint filed—set for 1-30-68 ;

@ 10:00 a.m. before Judge-Pence _ 3

Memorandum of Defendants Standard. Of Company |

of California and Chevron Asphalt Company in Sup-

port of Motion to Dismiss Count Two of the Com-:

plaint filed: &-

_ Statement of Standard Oil focoeey of California

- and Chevron_Asphali, Company. that said defendants

Join in the Motions to Strike filed by Shell Oi Com- .

pany and Union Oil Company of California filed

: Notice of Motion and Motion, of: Defendants Stand-

ard Oil Company of California and Chevron Asphalt:

‘Company for Production of Documents Under Rule

34 filed |

| J une 28—First Set of Interrogatories Propounded by De-

, fendants Standard Oil, Company of California and

"ie Asphalt Company filed

June 28—Certificate of Service filed .

aa 8

‘July 1—Motion of Defendant Union Oil Company of Cali-

_- fornia to Dismiss Count Two of the Amended Com-:

_’. plaint; to Strike; and for Separate Statement filed

e | | ‘Defendant Union Oil Company of California’ s First . |

Se- ° . . . Motion for Production of Documents filed :

Certificate of Service filed =~”

First Interrogatories Propounded to Plaintiff by De.

fendant Union Oil Company of California filed .

“e First Request for Admission Propounded to Plaintiff .

a by Defendant Union Oil Company of. California filed |

Memorandum for Defendant Union Oil ‘Company, of

California in Suppbrt of Motions to Dismiss Count

_ Two of the Amended Complaint; to Strike; and for

Separate Statement filed ee

J uly 18—Motion to-Strike and Objections of Shell Oil fo

Company to Plaintiff’s Rule 34 Motion to Produce

and First and Second Set of Interrogatories and | Sup- 2

porting Memorapdum { filed

July 19—Plaintiff’s. Memorandum i in Opposition -to Motion a,

of Defendants Standard Oil Company and Chevron

a Asphalt Company. to Dismiss Count II of = Com-

7B, “plaint filed - ; |

) _ Memoséfidum in Opposition to Motion of Defendant

Union Oil Company for Separate Statement filed

are

- Memorandum of Points and. Authorities in Response

"to the Motion to Produce of the Standard Oil Com-.

pany of California, Chevron Asphalt Company, Union ~

Oil Company of California and Shell Oil Company -

filed a

GRE TE et A a0! 5h

. Plaintiff’s Opposition to Defendants’ Motion to Dis-" |

miss or Strike Portions, of the Amended Complaint

filed 8 | ee 2 :

@bjections of Defendant,Unign Oil ewes of Cali-

fornia to Plaintiff’s Interrogatories filed

Affidavits. of R. A. Goddard, M. E. Joyce, EB. A. Me ~

| Fadden, C. E. Rathbone and M, S. Thompson i in. Sup- _—

port of Objections of Defendant Union Oi Company —

to Plaintiff’s Second Set_of interrogatories and Mo- .

tion to Produce-Under Rule 34 filed i ae be

: \ - ~~ Affidavit of G. H. O ‘Leary in Support of Objections

of Defendant Union Oi Company of California to-

Plaintiff’s First Set of Interrogatories filed |

Certificate of Service filed

Objections of Defendant Union Oil Company of Cali- |

fornia to Plaintiff’s ——- ‘to ane Under. Rule

34 filed —

. Memorandum. for Defendant Union Oil Conrgiairy of |

“© California in Support of Objections to Plaintiff’ sin |

terrogaiories and —_— to Produce Under Rule Se

filed | oa :

Objection to Defendant Union Oil - Compas Re

- quest for Admission of Facts and Motion to Strike. |

filed : os.

July 22—Objections of Defendants Standard Oil Company”

of California and Chevron Asphalt Company to Plain-

tiff’s Motion to Produce and. First and Second Sets.

of Interrogatories | and Motion of Said, Defendants

Seeking Protective Order filed

ah.

“10 =.

eee Memorandum of Standard Oil Company of California

ne and Chevron Asphalt Company in Support of Objec-

tions to Plaintiff ’s Motion to Produce and First and

Second Set of Interrogatories and Motion ‘of Said -

Defendants Seeking: Protective Order filed

7 . Affidavit of J. P. Bowman filed.

~~ Certificate of Service filed

Affidavit of J oseph if ‘Hendrick filed

J uly 26—Reply Brief. in ‘Support of Plaintiff’s Motion to

Produce and First and Second Sets. of Interrogatories

filed

Reply Mixaavandian of Shell Oil Company to Plain-

_-tiff’s @pposition to Motion to Strike Certain faba

) tions of Amended Complaing filed ~

rly 29—Reply of Defendants Standard Oil Company and |

Chevron. Asphalt Company to Plaintiff’s. Memoran-

- dum in ‘Opposition to Motion“to Dismiss Count 3 of

the Complaint. filed :

Reply Brief for Defendant Union Oil Campany of

California in:Support of its First Request for Ad- | |

_ mission, and in Opposition to Plaintiff’s Motion to

| Strike filed |

Closing Brief for Defendant Union Oil, — of.

“California in Support of Motions to Dismiss Count |

Two of the Amended Complaint, t to Strike, and for

__ Separate Statement filed

2?) Certificate of Service filed -

July 30—Entering seauieuiee Varin Motions—Discue- =

| _ sion re various motions—stipulations: to be memori-

8 alized in form of Pretrial order ~ » Pence |

My .

: i

J aly 81~Traineoript of Proceedings filed (0) (Hearing of

7-30-68).

: Aug. 2—Order filed ~- | 3 Pence

(re: ‘objections to. ‘Tequest for adtthdasion of facts)

"Aug. 19s-Pre-Trial Order: No. 3 filed Pence

Aug. 23—Second Amended Complaint filed

; Sept. 9—Third Amended Complaint fled °

—

Oct. 1—Answers of Shell Oil Company to. Written, Inter- |

rogatories Pursuant to Order of August 19, 1968 filed

- Answers of Defendant Union Oil- Company of Cali-

- fornia to Interrogatories Contained i in Pretrial Order 7

No. 3 filed

Oct. 2—Answers. to the First Set of si airmesadiins Pto- .

_ pounded by Defendants Standard Oil. Company of

. California and Chevron Asphalt Company filed .

"Answer to First Request for’ Admission Prcpomaied:

to Plaintiff by Defendant Union Oil Company of Cali-

fornia filed.

" Aypwers to First Galatea iia (mee to

‘Plaintiff. by Defendant Union Oil. Company of Cali--

- fornia filed ; ,

_ Answers to the’ First Set. of fabio ites Gee,

pounded by Defendant Shell Oil Company filed

(Exhibits to be attached to the various interrogatory

shewere Jocated in lrg» box im the vault) he |

- Oct. 3—Defendants Standard il Company of California’ 8

| and. Chevron Asphalt Comp y’s Answers to. Inter-

~ rogatories Contained in Pretrial Order No. 3 filed -

Affidavit of. J. P, Bowman Accompanying the Answers

, of Defendants Standard Oil Company’ of California a

| ana Chevron Asphalt Company to Interrogatories

Contained in Pretrial Order No. 3. sek | es

- Certificate. of ‘Service by Mail filed

Oct. 15—Motion of Shell” Qil ‘Company to. Strike Certain | .

_ Allegations of Count One and to Dismise Count Two |

and Count Three of the Third d Amended Complaint

filed - ‘

Oct. 16—Motion of Defendant Union Oil desma ‘of Cali-.

| fornia to Dismiss or Strike Count One and to Dis- .

miss Counts Two arid Three of fhe Third Amended. . -

~ Complaint, and-.in the Alternative to Strike filed’

- Memorandum ‘of Defendant Union Oil Company of

California. i in Support of its, Motions Directed to the 4.

. Third Amended Complaint fled = 8 == =,

+5, Certificate of Service filed =~ Poe %.

, ” Affidavit ‘of C. E. Rathbone in Support of Defendant.

” Union Oil Company’ of ‘California’s Motion Relative’ ©

" to Count Three of the Third Amended Complaint

* filed, | hs |

Get. 11—Noti¢e of Motion and Motion of Shell Oil Co. to

Strike intiff’s. Answers to Interrogatories, © Com-

Fel lier Answers and for Expenses filed * i

Notice of Motion’ and Motion of Defendants Stand-

ard Oil Company of California: and Chevron Asphalt

- Company for an Order Dismissing Counts Two and |

"Three of’ the Third Amended Complaint filed

Statement. of Standard Oi Company, of ‘California. ; .

“and Chevron Asphalt Company that Said Defendénts

eas 2 . y ae tee 13-..

>t "Join infec’ Motions 3) Stet’ sard to tote okt Dis :

: miss filed by Shell Oil Company: exe: ee Com- 3

_. pany of California ‘filed :

Joint Memorandum of. Defendants j jn Sippolt of. Mo-

tion te, Ditinist Paréns: Patriae Claim—Count Two

of Third Amended Complaint filed a imaek

Joint Memorandum, of Défendants in, Support of Mo- -

tion to Disinise Class, Astion—-Count Three of Thfrd

Amended “ee filed )

" Certifiate of. -by madi filed | |

- Oot. 25—Stipulation Extending Time filed—(Pltt, may Lita

: to and ingliding 11-468 to respond to Shell Oil Co.’ oe

- m/compel further answers to interrogatories) ~ ae

_ Oct. 20—Statement of ‘Shell Oil Company Joining i in Mo = =

“tion to Dismiss Count I filed pix Union Oil weeny :

ae Nov. n1—fdation adie Onder re Date of Hearing filed

Pence |

(ne: motions to be heard 12-13-68 @ 9:30 * before

Judge Pence in San Francisco) phen

_ Nov. 4-—Stipulation Extending’ Time filed—to ahd iaelnd-

_ ing 11- 18-68 |

“Now. 6—Stipulation Extending Time giminiialiind may °

have to and including 11-18-68 ‘to. respond to deft —

Shell Oil Co. *s. m/to oe further answers to in-

terrogatories. |

Notice of Motion « of Shell Oil Ciiapes to Dismiss ,

oe ;

- Complaint, for Failure_ of Plaintiff. to Comply. with

Diséovery Order of . This Court and for Expenses

filed—eet, for 11- 1-13-68.@ Ms a.m. . © g

14.

Nov. ‘14--Stipalation inxtending Time filed

(re: Pltf has to and’ including 11-18-48 to agen |

to Shell Oil Co.’s M/Dismiss complaint—further gstip-

"ulated ‘that hearing ‘said motion be hefd' on 12-18-68) .

Nov. 18—Memorazdum i in Opposition to Shell’s Motion to

Dismiss for Failure to Comply with Discovery Or-

ders filed my

* Nov. 19—Plaintiff’ 8 Memorendum in Opposition to De- |

fendants’ Motions Directed tp the Third Amended 7

Complaint filed : |

| Memorandum of Plaintiff in Opposition to Defendant :

Union Oil Company’ ‘Ss: Separate Motion Directed: to

‘the Third Amended Complaint filed _

Memorandum in. Oppositign © to Shell’ 8 Motion to

Strike Plaintiff’ s Answer to Interrogatories filed

Certificate of Mailing filed -

Dee. 3—Reply to Plaintiff s Opposition to” Motions Re-

garding Plaintiff’s Failure to Comply with Discovery’

Orders filed | |

Dec. 5—Joint idenoiscias _ all Defendants in er!

& of Defendants’ Motions Directed to the Third

Amended Complaint filed 3

‘Dee.. 13—Entering proceedings—Defendants Motions as to

Dismissal of Certain Parts of Complaint—argument

—motions submitted—(C. von Savoye) Penem

i ih as alg, *

1969 ° “ : |

‘ Jam. 29-Reporter’ s Transctint filed (voa) Savoye—

12-13-68)

-- Feb. 24—Meniorandum. Decision ‘on Defendants’ Motions

* to Dismiss or Alternatively to Strike Certain Allega-.

tions of Count One and to Dismiss Count Two and

Count Three of the Third Amended — —

(parties notified) | :

Mar. 5—Fourth Amended Complaint filed .

Mar. 19—Stipulation filed 7 Pence

(re:. 4th amended complaint),

Apr. 21—Motion of Defendants to Strike Paragraph rat ) ;

of the Fourth Amended Complaint, and Memorandum

._ of Points and Authorities filed

Brief of Defendants: Shell. Oil Gonmiens and Union |

Oil ‘Company of California int Support of Motion to -

Dismiss. Counts. 1 and III of the Fourth Amended -

Complaint filed . |

- Memorandum of Points’ and Autliorities in’ a

of Motions Directed to Count II and Count IIT of

the Fourth Amended Complaint filed

Joint Motion of Defendants Shell and Union for

Change of Venue, and Supporting Memorandum and

Affidavits, Appendix 1 (Narrative Summary of Typi-

cal Prejudicial Publicity) and Exhibit: A ( Represen-

tative Sampling of Prejudicial Publicity) filed —

May 5—Plaintiff’s “Memorandum in Support of Counts ~

Two and Three of the Fourth Amended Complaint

filed «- a oo

16.

Memorandum of Plaintiff in Opposition to Motion of —

, Defendants to Strike Paragraph 16%). of the Fourth

‘ Amended Complaint filed |

Plaintiff 5 Brief i in Opposition to the Joint Motion of |

Defendants — _ Union ‘el ‘Change of Venue —

filed : |

“May 8 Motion for ~— to . File a Motion to —

Pursuant to Rule 34 of the Federal Rules of “Civil

Procedure filed -

May 93—Plaintiff’s Supplemental Brief in Opposition to

Defendants’ Motion to Strike Paragraph 16(f) of the

Fourth Amended Complaint filed

Reply Memorandum In Support of Motions Directed -

‘to Count II and Count tt of the Fourth Amended

Complaint filed

May 29—Reply Memorandum for Defendants Shell: Oil

. Company and Union Oil. Company of California in

Support of Their Motion to Transfer filed

Entering proceedings—Various Motion®-argument—

defts’ M/Change of Venue denied without prejudice—

M/Dismiss Count II of the complaint denied without. °

prejudice—defts’ M/Dismiss Count III of the Com-

plaint granted—defts’ M/Certification / of denial . of

_ the M/Change of Venue and to Dismiss Count: IT of

. the Complaint - granted—Defts’ M/Strike Sec. 16(F)

‘of the Complaint granted w/Leave to Amend—Court

. to file memorandum decision—( DO) ~~ Pence | é

June 4—Order ‘Vacating Oral Order re Certification filed

(copy of order mailed to parties) * Pence

June 5 Amendment to Paragraph 16(f): of the Fourth |

Amended Complaint filed

en dire ae: SE Seek

+ RT A) aN hae Seng

- June 10—Transeript ok: Proceedings filed Secu

-Orndoff) |

| me June 19—Stipulation Re Plaintiff’s; Motion for Leave to

File a Motion to. Produce =the Rule 34 filed —

; ° « : Pence —

J uly i Sapalen oni ange to the First Set of | Inter-

rogatories Propounded by Defendant Shell Oil Com-

' pany, Appendix A and Appendix B Filed (Appentis

A and B located in yault).- , as

July 2—Deeision on Plaintiff 8 Parens Patria Count filed *

. - Pence ©

—— (re: deft’s M/Dismise Cox II denied)

-ec: AG, State of Hawaii, R. Vitousek, W. Swope, ;

F. Padgett | :

Order and Certification for. —— “Appeal

Under Section 1292(b) of Title ' 28 of the United

States Code filed ’ : " Pence

“{re: +M/Change of Venue denjed; M/Strike par 16(f) _

of 4th Amended. Complaint granted with leave. to -

- amend; Deft’s M/Disrhiss Count II of 4th Amended

Complaint denied; Defts’ M/Dismiss Ct. III of 4th =

| Amended Complaint granted without prejudice; court —

certifies order denying’ defts’ motion to dismiss Ct. ~

. II of complaint for interlogutory appeal under sec-

| tion 1292(b) of Title 28 USC) 2

eer. distributed to same attysas above (also is D.

Case, Esq). x ’

. July 28—Stipulation Extending Time. filed Pence

(re: all defts have to and including 8-12-69 to an-

swer pltf ’s 4th amended complaint) ye

- Pre-Trial.Order Number 4 filed. Pence

Se EEE —_

- July 30—Order filed (granting Petition for Permission to .

Appeal under 28 USC’ Sec. 1292(b)) (US Court..of ©.

Appeals for 9th Circuit) notified AY, State of Ha-

waii, Mr. “ee ‘Mr. Swope, MG. ose & Mr. -

- Aug. 1—Bond for Costs filed

Aug. 6—Bond for Costs filed

Aug. 8—Stipulation Extending Time filed Pence.

(re: All defts shall answer pltf’s 4th amended com-

plaint within 30 days after final determination of

interlocutory appeal with respect to denial of deft’s

Rak, M/Dismiss Count II of 4th amended complaint) 0

7 Aug. 18—Motion of Shell: Oil Company to Dismiss The .~

Complaint For Failure of The Plaintiff to Answer

Interrogatories and For Expenses filed

* Biipuiation Pursuant to Rule 11(f) of the Federal

. Rules of Appellate Procedure filed |

Aug. 19—Motion for Leave to File Notice of Depositions

Order filed (granting above motion) -_——- Pence |

cc: AG State of Hawaii; Gilbert E. Cox; Frank D.

Padgett; Roy Ag. Vitousek, Jr.; Daniel H. Case

Ang. 21—Plaintiff’s Reply to Shell Oil Company’ s Motion ' -

to Dismiss filed »

| ‘Aug. 25—Notice of Taking Depositions filed

Aug. 28—Notice to Take: Depositions ‘filed

; Sept. 2—Shell Oil Company’ s Reply to Plaintiff 's Oppo

ation to Shell’s Motion to Dismiss filed

0 19

" @April 1, 1968)

In the United States District Court . :

for the District of Hawaii

Qi ere ee ce

ae te _* | No. 2896 . ; =

State of Hawaii, a > — ).

| Plaintiff, | -

vs. ; ; | 7 . . . :

Standard Oil Company of California, = >

Union Oil Company of California,

and = Oil Company,

Defendants. ; ; ¥

COMPLAINT >

| "(Sherman Antitrust Act) —

™ . (Jury Demanded)

The above-named plaintiff files this complaint against

the above-named defendants and, demanding trial by

_ojury, —--* and alleges as follows:

fay

- es

COUNT ONE:

| -

Jurisdiction and Venue -

a 5 This’ complaint is filed and these proceedings are .

instituted against the named defendants under Sections .

- _4 and 16 of the Clayton Act (15 U.S.C: 12, 26) and under

_, Seotions 11 and d.18;Chapter 205A of a Laws we pt |

0 =

SC .«

~~. Hawaii 1955, as amended, to" secure damages: from ‘and

_ injunctive relief against the named defendants for viola-

. tions of the antitrust ‘laws | as: hereinafter alleged.

2 ‘Each defendant maintains an-‘ ‘office, transacts. a

_ ness, and is found within the ‘District of F Hawai-andie_..

. within . the jurisdiction : of the Court for the purposes of

- service. . . 7 _——.

Wo. aA

The Parties -

3 The- State of Hawaii is one of the sovereign states

which through its various departments, ‘agencies, institu-

, tons, universities and boards has been a substantial pur-

" chaser of refined petroleum products, including wthout

limitation, gasoline and asphalt. .

4. Standard Oil Company of California, a Dawwaie

corporation, with its principal offices’ located in San Fran-

cisco, California, is hereby named a defendant herein.

5. Union Oil Company of California, a California cor-

poration, with its principal offices located in Los Angeles,

_ California, i is hereby named a defendant herein. oe

; a: Shell Oil Company, a Delaware corporation, with

its principal offices located in New York, New ‘York, is

hereby named a defendant herein. ©

ze)

- : Co-Conspirators.

4. Other persons, firms or corporations participated as

| co-conspirators ‘in violation of the antitrust. laws herein- —

Nafter on :

Nature of Trade ond’ Commerce

3 Each of the defendants is an integrated oil com-

| pany engaged in the business of. purchasing and produc-

oa ~—ing_crude, oil, transporting crude ‘oil and refined petroleum

products, refining crude into refined petroleum products

_ “and in the wholesale and ‘retail sale of refined petroleum

products. a

9. Ties ahs eeanateced ah refinery in the Stato ‘of

7 Hawaii is owned by defendant Standard. Substantially

all of the crude oil refined at said refinery is imported

into Hawaii, under applicable Federal regulations, pri-

marily from Far Eastern countries. | |

10. The refined petroleum products, ‘inthedinig gasoline, ce

produced at said refinery are distributed by defendant

through service, station and other outlets most of which ~

are operated by*lessee dealers. Some refined petroleum 7

products are sold by Standard: directly to Federal, State

and Municipal government agencies. Substantial quanti- a ee =

ties of gasoline are shipped from the Hawaii refinery to |

_the mainland for sale and distribution. there. Finally, 7

Standard supplies refined. petroleum products to the other

defendants and other Major integrated ail. conipanies for |

their resale and/or distribution in Ha ach _

| idants ships refined sich

_ products, includi ig gasoline, froin the mainland to Hawaii

for resale — farther distribution ; in Hawaii or else-

_ “where. : j

«12. Gasotine represents epproxinately 90% in cob :

of dollar value, of the Tefined aber; products sold by.

eash defendant though servicer stations. By meang of

various provisions in their leases, subleases and supply

contracts. with service station operators, | and in other

_ ways, each defendant has been able to and does dominate

and control the manner in which- independent service sta-

tion operators conduct their reapective busihesses. Each

defendant effectively controls the price at which most |

dealers sell gasoline; each controls the hours o operation |

_ of the independent dealers; each controls thé details of

bookkeeping, “ccounting procedures and records; each

controls the manner in which the dealer displays and —

_ advertises merchafidise as well as the type,’ quality. and

brands of automotive accessories and miscellaneous mer-—

chandise and the price thereof which the dealer handles

and sells and many other details of the dealers’ business

affairs. Each defendant compels and controls dealer par-

. ticipation in regional, national and local promotional pro-. |

"grams such as the giving of stamps, steak knives, glasses

and game tickets. This domination and control over the

' dealérs is enforced by each defendant through @ system

of policing which subjects the dealer to inspection, sur sur:

veiliance < and harassment. by. dealer representatives and

others. :

18. During the ¥ saint covered by this s complaint there

has een 8 continuous’ and regular flow in’ foreign com-

merce of crude oil obtained from sources outside the

_ State, of . Hawaii through the Standard refinery in Ha-

waii producing gasoline and other refined petroleum sold

re service stations and others in Hawaii and on the main-

land. st UF Bae +2

. Pek a 93°

| | “Offenses Charged — aa

14. Bogivathy at a time. unknown to plaintiff, and con-

tinuing thereafter, up tovand including the date hereof,

defendants entered: into unlawful contracts, and a com- .

bination and conspiracy in unreasonable restraint of trade «

and commerce ini the Sale, marketing and distribution of

refined petroleum products .and said defendants have

combined and conspired as herein set forth to monopolize,

and said @fendants have ‘Tonopolized such trade and

commerce in violations of Sections i and 2 of ‘the Act of

Congress of July 2, 1890, commonly known as the Sher-

man Act (15 U.S.C., secs. 1 and’2) and Sections 2 and 7 _

of Chapter 205A of the Revised Laws of “Hawaii 1955,

as amended. |

15. The. aforesaid - contracts, combipAtion a con- |

- spiracy to restrain trade and commerce, ‘and the com-

” bination and conspiracy to monopolize and the monopoli-

” gation of such: trade and commerce, have consisted of a

continuing agreement, and .concert of ection between ‘de-

. fendants the substaiitial . terms, purposes and intent of

which have been that said defendants and. the 00-

conspirators : .

- (a) agreed to fix, stabilize and establish wholesale end: |

resale prices on gasoline; \

_ (b) agreed to fix, stabilize and establish prices” for oy,

liquid asphalt; > 7 “\

"| (@) segreed to rig bids on the vale of ‘gasoline and |

Hart ervbalt to. tp State of Hawaii, itt poltion! cub

sand its political subdivisions ;_ 7

(d) agreed to restrict the number of refiaars of crude

. - oil in Hawaii; ae , . é:

(e). agreed / to enihain: or assign “import quotas. for

foreign erude and to exchange refined petroleum products -

among thensélves so-as (i) to exclude actual ‘and/or po-

even though most of the refined petroleum prod- .

nets sold: in Hawaii are produced from lower — arc |

- eign ernde oil. |

VI ‘

Injury to: Plaintiff ;

16. The unlawful contracts, combination, conspiracy jn

restraint of trade, unlawful - combination and conspiracy

to monopolize, and monopolization have resulted in the -

_ plaintiff through its ‘respective departments, institutions,

agencies, etc., paying more ‘for refined petroleum prod- -

ucts thar would have been paid in a freely operating

competitive market. Plaintiff has not yet 4 ascertained ‘the

precise exteht of said: damage ; and when" said amount —

has been ascertained, plaintiff will ask leave of Court. to”

_insert said sum herein. sy ee ig high ©

e e

2° eouNT TWO

17. Plaingiff realleges the -matters set ont in para:

graphs 1, 2, 3, 4, 5, 6, 8, 9, 10, 11, 12 and 13 of Count One

a .

)

6 ease 8?

divisions, or to contractors submitting bids to. . the State . |

to price refined cietebhiite products ‘tee |

Hawaii/on the basis of posted crude oil prices on the =

. ‘ .

ered with the same was and effect: as though the alle- |

gations of each of said paragraphs were- set forth pean full

herein: eal ee

18. Beginning at a. time unknown to plaintiff dai con:

tinuing thereafter up to and including the date hereof,

each: defendant. has violated Section 2(a) of. the Clayton

Act, as amended by the Robinson-Patman Act (15 U.S.C. .

—13(a)) and Section 1.1, Chapter 205A, Revised Laws of ©

_' Hawaii ’1955, as amended, by. charging higher prices for.

gasoline: of like grade and quality sold at wholesale in

' Hawaii than charged for gasoline of the same grade and

_- quality sold by each of said defendants at major West |

Coast cities, including but not limited to San Francises ,

and Los Arigeles. .

19... The effect of such ‘price discriminations Hy been

and: may be to substantially lessen conipetition and tend *

to create: a monopoly in the. production, distribution and —

sale,of, refined petroleum products, principally gasoline,

‘in the State of Hawaii and further to i injure, destroy and

Prevent ‘competition in said line of commerce in said z

State. ; PAGERS, 3

“96; The ‘guooline subject to thie unlawful discrimination

alleged in the preceding paragraphs has moved’ and moves

| directly in interstate commerce from tefinery facilities of

_ defendants in California: 4p. Hawaii.

- Wherefore, plaintiff pri ay : :

1. That the Court sietes and decree that the are

fendants. (a), have, combined in réstraint of trade and °

commerce hereinbefore described ; (b) have. combined to ~

monopolize ; (c) have actually monopolized the trade and _

commerce hereinbefore: _— in violation of ' Sections ¥

7" |

1 and 2 of. the Sherman Aoi and Seotions 2 and 7 of

Chapter 205A, Revised Laws ‘of Hawaii 1955, as amended;

and (d) have unlawfully discriminated in price in viola-—

tion of 15 U.S.C. 13(a). and Section 1.1

_ Reviséd Laws of Hawaii 1955, as amend

2. That plaintiff recover its s, -which, when,

ascertained, be trebled as required

Clayton Act; :

3. That defendants and each of them be enjoined from

continuing their unlawful conduct ;

4. That plaintiff bes awarded reasonable attorneys’

| ~ fees as provided by Section 4 of the Clayton Act; and:

| \ 5. ‘That plaintiff recover the costs of litigation as

Provided by Section 4 of the ‘Clayton Act.

Dated : Honolulu, Hawaii, April 1, 1968. . ion

Patricia ’E

Douglas S. .

Deputy cea General

Joseph L.. Alioto

Maxwell M. Blecher

. Lawrence Alioto ..

CS, By /s/ GilbertK.Hara

YY es i ~ By /s/ Maxwell M. Blecher

| . — Attorneys f for Plaintiff.

ee | i

soni. 6, 1968)

(Title. omitted in printing] ——— = aac |

THIRD AMENDED COMPLAINT -

(Sherman Anti-trust Act)

| (Jury Demanded) ° _ | ;

The above-named plaintiff files this ‘complaint against

the above-named defendants and, demanding trial by jury,

complains and alleges as follows: | al :

COUNT ONE

Jurisdiction and Venue Says

'. This complaint is filed and these proceedings. are

instituted against the named, defendants under Sections 4

. and 16 of the Clayton Act (15 U.S.C. 12, 26), to secure -

damages from, and injunctive relief against, the named.

_ defendants for violations of the arititrust laws as herein-

‘after alleged. © | ea ee

2. Each defendant maintains an office, transacts busi-

ness, and is found within the. District of ‘Hawaii, and is

within the jurisdiction of the Court for the purposes of

Service, os % > |

i ' Seen

: _ The Parties — ,

-< b The State of Hawaii is one of the sovereign states ie

which through its various departments, agencies, institu- 7

' tions, universities and boards las been a substantial pur-

chaser of .refined petroleum products, including without =

-limitation, motor gasoline and asphalt. MS ae ,

. . A . a . -< .

, . . J ’ *

ee 5 ~ , . 4. bl os

ll a el

28 :

* "4 Standard Oil Company. of California (hereinafter,

Standard), a Delaware corporation, with its principal —

- offices located in San Francisco, California,’ hereby 1s.

named a defendant herein.

5. Chevron Asphalt Company (hereafter, Chevron), &

Delaware corporation, with its principal offices in San

Francisco, California, a wholly-owned subsidiary of Stand- -

ard Oil Company of California, hereby is named a defend- »

ant herein. — |

6. Union Oil Company of .Californie (hereafter,

Union), a California corporation, with its principal offices

located in‘ Los Angeles, California, hereby is named a

defendant herein. ole

7. Shell’.Oil Company (hereafter, Shell),.a Delaware

- corporation, with its principal offices located in New York,

New York, hereby is named a defendant herein.

_ i

Co-Conspirdtors

8. Other persons, firms or corporations participated as

co-conspirators in violation of the antitrust laws herein-

after alleged. :

_. IV

; Nature of Trade-and Commerce > a

9. Bach'of the defendants is an integgated oil company

_ engaged in the business of purchasing and producing

crude oil, transporting erude oil and refined petroleum

products, refining crude into refined petroleum products

and in the wholesale and retail sale of refined petroleum

products. : . |

10. The only commercial oil refinery .in the State of

Hawaii is owned hy defendant- Standard. Substantially

all of the crude oil refined at said4refinery is imported

into Hawaii, under applicable Federal regulations, pri- |

marily from Far Eastern countries.

11. The refined petroleum products, including motor -

gasoline, produced at said refinery are distributed by,

defendant through service: station and other outlets most

-of.which are operated by, lessee dealers. Some refined

petroleum products are sold by Standard and/or Chevron

directly to Federal, State and ‘Municipal government

- agencies. Substantial quantities of motor gasoline are

a a from the Hawaii refinery to the mainland for

sale and distribution there. Finally, Standard supplies

refined petroleum products to the othér defendants and

other major integrated oil eon aus for their resale .

and/or distribution in Hawaii. ~~

12. Each of the defendants ships refined petroleum

products, iricluding motor gasoline, from the mairland-to

Hawaii for: resale and/or further distribution in Hawaii ,

or elsewhere.

13. Motor gasoline cenreeanta cnennnatals 90% (in

terms of dollar value) of the refined petroleum products .

sold by each defendant through service stations. By

means of various provisions ip their leases, subleases and

supply contracts with service station operators, and in

other ways, each defendant has been able to and does

dominate and control the.manner in which independent:

service station operators conduct their respective busi- _ .

nesses. Each defendant effectively controls the price at

which most dealers sell. gasoline; each controls the hours .

of operation of thé independent dealers; each controls the

details of bookkeeping, accounting procedures and rec-—

ords; each eontrols the manner in-which the dealer dis-

plays and advertises merchandise as well as the. type,

_ quality and brands of automotive accessories and miscel- a

laneous. merchandise and the price thereof which the

dealer handles and sells and many other details of the .

dealers’- business affairs. Each defendant compels and

controls dealer participation in regional, national and.

local promotional programs such as the giving- of stamps, ~

steak knives, glasses and game tickets. This domination

| and control over the dealers is enforced by each defend-

ant through a system of policing which subjects the

- dealer to inspection, suryeillance and harassment by~

‘dealer. representatives and others.

14. During the period covered by. this sian com-

plaint there has been a continuous. and regular flow in

foreign commerce of crude oil obtained from sources -

outside the: State of. Hawaii through the Standard re-

finery in Hawaii producing motor gasoline and other

refined petroleum products sold to service stations and

others in Hawaii and on the mainland.

‘Offenses Charged

‘15. Dates at. a time ‘unknown to plaintiff, and -

continuing thereafter up to and including the date hereof,

defendants entered into unlawful contracts, and a com-

bination and conspiracy in unreasonable restraint of

trade and commerce in the sale, marketing and distribu-

tion of refined petroleum products and said defendants

have combined and conspired ‘as herein set forth to mono-

" polize, and said defendants have monopolized, such trade

' and commerce in violatioris -of' Sections 1:and 2 of the

_Act of Congress of July 2, 1890, commonly known as

the Sherman Act (15 U.S.C. Sections 1 and 2)..

16. The aforesaid contracts, combination and con-

spiracy “to restraih trade and ° commerce, and the combi- |

nation and conspiracy. to monopolize and the monopoliza- -

. . tion of such trade and commerce, have consisted of a

continuing agreement and. concert of action between de-

fendants the substantial terms, purposes and intent of

which have been that said defendants and the: co-conspir-

atorsé ee

(a) “agreed to fix, : ‘stabilize and establish unreasonably

. high wholesale and résale prices on motor gasoline and .

other refined petroleum products;

(b) agreed to maintain and enforce resale, — ‘on

' motor gasoline; ; : -

(ce) ‘agreed to fix, stabilize and establish unreasonably

high prices for liquid a oem

(d) agreed to rig bids on the - of motor gasoline,

liquid asphalt and other\ refined petroleum products to

the State of Hawaii, its. political subdivisions, or to con- -

tractors submitting “bids to. the State and its political —

subdivisions; a ‘ : |

( é)* agreed to restrict, the number’ of refiners of ue

oil in Hawaii; ; ,

*(f) ‘agreed to avenge or ‘assign import ‘quotas. for |

foreign crude and to exchange refined. petroleum prod-

| ucts SmORg themselves in order’ to: _(i). exelude actual

andvee ental’ competitors, and Ww maintain high,

arbitrary prices; : |

— (g) agreed to ‘price refined petroleum products in

Hawaii onthe basis of posted crude oil prices of the |

mainland even though most of the refined petroleum

products sold in Hawaii are produced. from. lower priced

pice crude oil.

. vI

os Injury to Plaintiff

17. The unlawful contracts, combination, conspiracy in

restraint of trade, unlawful combination and conspiracy

_to monopolize, and monopolization have. resulted in the

plaintiff, through its respective departments, institutions,

agencies, ete., paying more for refined petroleum prod-

ucts than would have been paid . in a freely operating

| competitive ; Plaintiff has not yet ascertained the

precise extent of. said damage. However, when said

amount has been ascertained, plaintiff will ask leave ot

~ Qourt to insert said sum herein. a !

ei ‘COUNT TWO

“1g. * The above-named plaintiff, acting in its capacity

as parens patriae, and/or as trustee for the use of its”

_ citizens- who purchased refined petroleum -products, from

any defendant or: co-conspirator herein, realleges the

matters set:out in paragraphs 1, 2, 3, 4, 5, 6, 7, 8, 9, 10,

11, 12, 13, 14, 15 and 16°of Count. ‘One herein with the

same force and effect as though the allegations of each of

said paragraphs were set forth i in full herein.

19. The unlawful: “contracts, combination, conspiracy

in restraint of: trade, unlawful combination and conspir-

~ls)

ere:

acy to monopolize, and monopolization have resulted in

the plaintiff, through its. respective departments, insti-

| tutions, agencies, ete. and in, its citizens, paying more for

a freely operating competitive market. Plaintiff has not

yet ascertained the precise extent of said damage to itself.

and its citizens, however, when said amourit has been

ascertained, plaintiff will ask leave of Court t to insert said

sum herein.

| COUNT THREE

20. ~The above-named plaintiff, acting on its own

behalf and on behalf of its citizens who purchased refined

petroleum products from any or alt of the above-named

defendants or’ co-conspirators, brings this ‘action indi-

vidually and pursuant to Rule 23 of the Federal Rules of

Civil Procedure, as amended, as the representative of the

refined petroleum -products-than would have been paid i in -

aforesaid class, to obtain damages from, and equitable

_ Telief against, the above-named defendanis ; and so doing,

plaintiff realleges the matters set out in paragraphs et a

3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15 and 16 of Count One

‘herein with the same force and effect as though the alle-

gations of each of said Paragraphs were set forth in full —

‘herein.

21. The nature of the offenses charged, commerce.

involved, and relief sought present substantial .questions .

| of both law and facts common to the named. plaintaff and

to all.of the members of the class. Because of the large

number of citizens of the State of Hawaii who have pur-

_ Chased motor gasoline ‘and other refined petroleum prod-

uctss from the named defendants and/or | ‘their retail

dealers and other co-conspirators and because of the

34 %

_ expense and burden to the parties and to. the Court of _

litigating their claims separately, it is impracticable to

bring them ail before the Court. The ‘named plaintiff,

however, fairly i insures the adequate representation si the

_ interests of the entire class. 3 7

22. The unlawful contracts, . biathlon ton, conspiracy in

« ‘restraint of trade, unlawful combination and ‘vonspiracy ,

to monopolize, and monopolization have resulted in the

plaintiff, through its respective departments, institutions,

agencies, etc., and in its citizens, paying more for refined |

petroleum’ products than would have been paid i in a freely :

operating competitive market, Plaintiff has not yet ascer-

: tained the precise extent of said damage to itself and its — |

citizens; however, when said/ amount has been ascer-.

tained, paeee will ask leave of Court to insert said sum

herein.

. "Wherefore, olaiatiff prays:

ae 1. That the Court adjudge and halen that the defend-

| —~ ants: (a) have combined ‘in restraint of trade and com- :

merce hereinbefore’ described; (b) have combined to mon- .

opolize ; ‘(c) actually have. ‘monopolized the trade and here-

-. inbefore described in violation of Sections 1 and 2 of the

Sherman: Act;

e Y That. plaintiff recover ‘its plamabees which, when

"ascertained, be trebled as. required ‘by Section 4 of the

Clayton Act; -. —

3. That plaintiff recover, as taints or as representa-

tive of the above-pleaded class, the damages sustained by

its citizens, which, when ascertained, be trebled as re-

‘quired by Section 4 of the Slayton Act;

4, . That defendants and each of them ‘be enjoined from

continuing their unlawful conducts

5. That plaintiff be ‘awarded es attorneys

| fees as provided by Section 4 of the 2 Clayton Act; and

° 6. ‘That plaintiff recover the sea of litigation as pro-— a

vided by Section 4 of the Clayton Act.

Dated: errs 6, 1968.

tenuis asia

_ By Bert T. Kobayashi,

Attorney General hy

<GilbertK.Haras

. Patricia Kim Park a

. Deputy Attorneys General ~“

Joseph L. Alioto 3

-Maxwell M. Blecher |

- 4 . Francis O. ‘Scarpulla

By /s/ Francis 0. Soarpalia

“ 36

te [Title omitted’ in 5 sett

NOTICE OF MOTION AND MOTION OF DEFEND.

_ ANTS STANDARD OIL COMPANY OF CALIFORNIA

: 1968, at 10 o’clock A.M.,”

can be. heard, defendants STANDARD OIL COMPANY

* PANY will bring the followi

"before the above-entitled Court \at the United States Court a

“AND, CHEVRON ASPHALT COMPANY FOR AN.

| ORDER DISMISSING COUNTS TWO.AND THREE OF

‘THIRD AMENDED. COMPLAIN T

To State , Hawaii and. to-Bert T. Kobayashi, Gilbert: K. as

Hara, Patricia Kim Park, Douglas 8. Hasegawa,

Joseph L. Alioto, Maawell : M. Blecher, Lawrence 7

Alioto and Francis O. Scarpulla, its attorneys: a

Please take notice that Ly the 13th day : ‘of November,

soon thereafter as. counsel

OF CALIFORNIA. and CH \VRON ASPHALT COM-

* motion on for hearing

House in Honolulu, Hayaij

: ' | MOTION

Defendants Standard Oil Company of California and —

" Chevron: Asphalt Company pursuant to Rules 12(b) (6)

and 23(c)(1) of the Federal Rules of Civil Procedure

‘hereby move this Court for an order dismissing Counts.

Two and Three of the complaint on. - the grounds that

said. Counts Two and Three fail to state claims upon

which relief can be granted, and onthe ground that Count

Three fails to meet the prerequisites of Rule 23.. This -

motion is based. upon the foregoing notice of motion ; the

- jomt memorandum of defendants in support of motion to

nae dismiss parens patriae claim—Count ‘Ewo of third amended.

. conmplaint; the joint memorandum of ‘defendants in

| ah tae ee

| support of motion to'distinies’ clase action—Count Three

- of third "amended. compiaints; ‘the affidavits of A,B.

' Stevens, J. W. Phegley, Otto Hoefler, W. L. Sanor and °

the various’ retail dealers submitted in support of the -

‘motion to dismiss Count 'Three; and upon all the records ;

end papers on file with the Clerk of the abpve-entitied-»

Court in the above-entitled action. :

Dated: October 14, 1968, : NO

Pillabury, Madison & Sutro )

, . Francis R. Kirkham 23 i

'. “Richard J.Macleury = ° /

James B. Atlin 0

Pratt, Moore, Borts & Case s

Daniel H. Case eee Ae 6

Roy A. Vitousek Jr: 2

. By /s/ Francis R. Kirkham

Attorneys for Defendants. Standard :

Oil Company. of California and

mag enter amacr mony

: a

ee ae , (Oct, 15, 1968) fw

* [Title omitted in printing] | : as

‘MOTION TO STRIKE: CERTAIN ALLEGATIONS

“OF COUNT ONE AND TO DISMISS COUNT TWO

| “AND COUNT. ‘THREE OF THE THIRD. AMENDED

- COMPLAINT —

COUNT ONE

| 38

in this action, by its attorney herein moves to strike from

‘ Count. One of the Third Ayaniiot Seerey the, Lotlow-

ing:

= - plaintiff has no interest in and can make no, claim

a concerning - that aspect of gasoline marketing . since’

= it. makes no purchases at that level ;

B. Al references to exude oil import quotas irias- :

“much as the formation and administration of those

* ah. quotes are. immune: from ‘attack in. this lawsuit; and

“1 @ All references to ‘‘refined petroleum produc is

4n-that the: interests of the- plaintiff do not. include

any product other than gasoline and liquid asphalt,

Tn support of each of the ‘ ahowe motions, Shell relies

on its Memorandum in oumpert of like motions to strike

: ‘

iy ee | ty Pursuant tp: Rule 12 of the Federal Rules of Civil

te Procedure, SHELL OIL COMPANY (Shell), a defendant .

3 re “All velecapets- to the asia nepecti of rg

a gnsotine marketing industry on the grounds that the —

tne

. like allegations from: the First Amended Complaint (See

‘Memorandum dated June 24, 1968, pp. iid

COUNT TWO .

| Il. Pursuant to Rule 12 of the Federal Rules of Civil

' . Procedure, Shell moves. to dismiss Count Two of the

Third Amended Complaint on the grounds that (1) ‘no

parens patriae cause of action. by plaintiff cin or does —

. exist with respect to the matters alleged; and (2), no such |

cause of action has in fact been oe alleged*by the

M plaintiff as ‘‘parens~patriae.”’ —

In support of the above motion Shell relies on the J dint

_ Memorandum in “Support of Defendants’ Motion to Dis-

miss Count Two of the Third Amended ——— dated

October 15, 1968, ; : | 7

COUNT THREE .

IL Puteienst ‘to Rule 23 of. the Federal hie of Civil

| Procedure, Shell herein moves to dismiss Count Three of 7

the Third Amended Complaint on the ground that it fails

to comport with. the requirements for a class action and: .

would further create impossible burdens of management.

The affidavit of D. Campbell Ross, attached hereto as _

Exhibit A, is, filed i in support of this motion. |

Im support of the above motions Shell relies on the

J oint Memorandum i in Support of ——— Motions io

- Disiniss - Count Three of the Third Amended Complaint;

dated October 15, 1968. :

Respectfully submitted,

/s/ William Simon —

William Simon *_

Richard T.. Colman |

Howrey, Simon, Baker & Murchison

_* 1707 H Street, N. W.

Washington, D. ©. 20006 —

Gilbert-E. Cox

William M. Swope |

Smith, Wilde, Beebe & Cades

‘First National Bank Building ©

Honolulu, Hawaii 96808

S. RB. Vandivort —

50, West 50th Street

a kes New York, New. York 10020.

4 Attorney for Defendant

SHELL OIL COMPANY:

Dated: October 15,1968 *

AFFIDAVIT OF D. CAMPBELL ROSS

‘County of Honolulu a

State ef Hawaii—ss_

D. ‘Campbell Ross, being first duly sworn ‘on eath de-

poses and says:

1. I am and have been for several years State Maus:

in Hawaii for SHELL OIL COMPANY (Shell). .

2. In connection with my duties as State Manager I

am responsible for all Shell’s sales of gasoline and re-

lated refined. petroleum products i in Hawaii.

3. The sale of gasoline to the State. of Hawaii by Shell

‘is entirely on competitive bids submitted to the State by.

Shell. and others on a seal bid basis. The formation of

’ Shell’s bid price is in no way related to or dépendent.

| upon the price charged at wholesale by. Shell or the prices

charged by its dealers at retail, except that at the re- -

‘quest of the State the bid price may be stated as a dis.

count from Shell’s posted tank wagon ‘price. Rather, the

said bid prices are formulated individually for the State

~ upon Shell’s estimate of a successful competitive price

and other competitive factors relating to the ‘supply and

demand for gasoline. ‘The current bid price. -submitted by .

Shell to the State and on which it is now selling gasolifie |

to the State in Oahu is 16¢ to 17¢ a gallon below the

average or mean posted retail price charged at service

stations selling Shell brand gasoline ‘én Oahu. The State

of Hawaii owns and atilizes its -own gasoline storage

facilities. ot |

4. The State of Hawaii does pay certain credit: ard |

invoices on purchases at retail from Shell dealers. Credit

ae card purchases from’ Shell dealers account for a very smal} |

percentage of the purchases made by the State. In the

month of October, 1967, credit card invoices show that the

> State purchased ‘ petroleum products, including products

other than gasoline,.on Shell credit cards, in the total

amount. of $5564 2. Most of those purchases were on the Is: _

land of Molokai. Excluding Molokai purchases, the State’ Ss

_, total purchases that month on Shell credit cards were only

. $85.30. This represents no more than 200 gallons of gaso- —

line. This is a typical month for the State’s Ruschases

from Shell. In that same month, Shell sold the State '

47,000 gallons of gasoline on bid, making the Shell credit

card purchases 0.04% of the State’s purchases from Shell.

Shell’s total monthly sales in Hawaii are about 4 million

gallons. . | .

5. Only the City and County of Honolulu, the Federal

Government and certain large commercial ‘plantations

also purchase from Shell upon a sealed bid basis.

." 6. Approximately 85%-90% of the motor gasoline sold

by Shell in Hawaii is sold for .the purpose of | resale at

retail to motorists. Approximately 40% of that volume is -

sold for resale to motorists at Post Exchanges and Ships -_

Stores. There were about 670 service stations of all ©

brands.in the State of Hawaii in 1966. About 122 of that

number were Shell branded stations. In addition to Shell

stations there have been during the period of the last four

years also stations. supplied: by the following companies :

Standard; Time Oil Company, Union, Flying A —

water), Phillips, Texaco. and Armour.

‘7. Lave been the senior Shell marketing person: in

: Hawaii for more than five years. Throughout: that time

Shell has never controlled, fixed or set, nor sought to con-

trol, fix, or set, the resale price for gasoline “sold by any

of its iadependgat service station dealers. To the contrary, :

ae 43

all ‘Shell dealers have been and are told by Shell that they

| are free to determine their own prices for ‘gasoline in

response to their own judgment vf competition and other

factors and each of such dealers in fact determines his -

resale price free of any control by Shell. It has contint-"—

ally been my. observation that gasoline prices often vary

at some service stations-from time to time. The prices |

_at which gasoline is sold at Post Exehanges and Ships

Stores have been observed to be as low as 29. 2 for regu-

lar grade gasoline.

8. The wholesale or tank-wagon price charged Shell

dealers ‘for regular grade gasoline in Oahu“ss 1¢ higher |

than. the tank-wagon price charged Shell dealers in

Phoenix, Arizona and Reno, Nevada. It is 2¢ per gallon

higher than the tank-wagon price charged Shell dealers

in San Francisco. or Los Angeles.. The. mean retail price :

in Honolulu of 42.4¢ for a gallon of regular grade gaso-

. line [an average of the two most frequently posted prices

of 41.9 and 429] is 8.5¢ higher than the mean. price of

33.9¢ per gallon charged in California. ge .

9. On August 12 and 13, 1968, I caused Shell employees

working under my direction to make a full-survey of the

retail prices posted at all service stations in Hawaii. The

following are the prices observed for regular. grade gaso- |

line i in Oahu: — |

35.9 400 411 421. 429 459

378 40.1 413 422 430 461

379 404 414 423 435 © 463-

385 405 415 425. 439

6889 =6« «408 «41.7426 244.8

395 409 419 427 449

399 410 420 428 , 451 —

‘The following were some of the —— an promotions

_ observed then being offered : _ ra

- 1¢ off for $2.00 purchase ;

Free coke with 10 gallons;. ee ae

. Gold Bond, Mahalo and Royal Stine’ in snails, |

double and- Gaple _ — relations to amounts

purchased ;

Two, three, tour and five cents discount;

. a Six’ cents military ieceeiian

10.‘ It is my. belief based on many years’ experience

. in Hawaii that almost-every servicé station in Oahu gives _

at least some of its customers, though not necessarily to

all customers or in the same amount to all customers, &

. discount, promotion or give-away. : sa 8

“11. Shell does not sell paving asphalt to ‘the State of

Hawaii. It sells paving asphalt only to es and

: contractors. The State, in turn, purchases paving in place

from contractors which includes paving asphalt mixed

_ with aggregate and ‘laid in place as part of a finished

job, in connection with a bid contract, including within —

the bid price all of the various other materials and labor.

~ costs that are -part of ‘the completed. job. |

— Js/ D. en Ross

Subscribed and sworn to before me -. .-

this 14th day of r, 1968. bes

Dorothy P. Shi ura

’ Notary Public \ —

apie it Paaiaa Clee: OO Re eS

“State of Hawaii. a, eae : ;

oo. oo My Commission Expires 9/15/70

| ; [Cértificate of Service omifved in printing)

+ (Oot. 15, 1968) 3

[Title omitted in 1 printing) Sg i

-MOTION OF DEFENDANT UNION OIL COMPANY

OF CALIFORNIA TO DISMISS OR ‘STRIKE

COUNT ONE AND TO DISMISS COUNTS TWO

AND THREE OF THE THIRD AMENDED. COM:

PLAINT, AND IN. THE ALTERNATIVE TO.

STRIKE.

~ Defendant Union Oi Company of California moves the

Court j as follows:

1. To dismisq or strike Count One. of the ‘Third

Amended Complaint as sham. €

2. To dimiise Count Two of the Third Amended Com-

. plaint, for failure to state a claim upon which. aang can —

be granted.

3. To determine > that: psa Three of the Third

Amended’ Complaint may not be ‘maintained as a class

action, upon the ground that none of the requirements of

' F.R.Civ.P.. Rule 23 for maintenance of a class action is

present, and that, since Count Three serves no purpose -

other than to attempt to convert Count One into @ class

action, it’ should therefore be dismissed. R Sor

4. In the event the motion to dismiss or strike Count

One as sham be not granted, to strike ‘the following por-

- tions of Count One: ee ee

{a) paragraph 13 thereof (or i in the idienbitais. all of

the allegations - -of Peigrenh 13, — the’ etree sen. _

_ tence); and

(b) subparagraph ‘16(f) thereof, upon the ena that

said allegations are and each of them is immaterial end

nu penton

Among the material upon which the motion to’ dismiss

7 strike Count One as sham is based are plaintiff’s ;

‘‘ Answer to First Request for Admission Propounded to

Plaintiff by Defendant Union Oil Company of Califor-

nia’’, plaintiff's ‘Answers to First Interrogatories: Pro- |

pounded to Plaintiff by Defendant Union Oil Company of _

ay California’, its ‘‘Answers to the First Set of Interroga-

October 15, 1968

tories Propounded by Defendants Standard Oil Company

of California and Chevron Asphalt Company”’, and its .

** Answers to the’ First Set of Interrogatories Propounded

by Defendant Shell Oil Company”.

Among the. material ‘upon which the motion to deter-.

mine that Count Three may not be maintained as a. class

action and should therefore be dismissed is based is. the

affidavit of C. E. Rathbone filed lierewith. All the fore

going motions are also based upon. the Third Amended .

Complaint, the memoranda served and filed iigianons and

upon -all of the files herein. at

; ” Respectfully submitted, ee.

Fell AMES 882 EG

- Douglas C. Gregg HE

_. B.A. MoFadden ts

- Maleolm T. Dungan | 3

Brobeck, Phleger & Harrison

Frank D. Padgett .

me ist Padgett, Greeley, Marumoto & Akinaka

oh Tay Jae Moses Lasky

: Attorneys for Defendant, ~ |

Union Oil Company of California.

¥,

f, .

EXOERPTS FROM REPORTER'S TRANSCRIPT -

_ DATED DECEMBER 138, 1968

(Rep.Tr. p. 24, lines 12-22):

(Mr. Blecher] What you really‘then get dows to, when °

you take all these ancient notions and shift them aside,

is whether or not parens patriae constitutes an effective

means of the State, acting through its Attorney General,

recovering the money that has been taken from the State

by reason of a ‘price fixing arrangement applicable to

‘ consumers and whether it is simpler to administer .that

kind of lawsuit on. the one hand than to face the-adminis-

trative problems -that have been imposed by the statute

under Rule 23° of class action procedure. [f. =. +]

(Rep fr. p. 26, lines 4-9) : oe tale}

“{Mr. Blecher]. This doesn’t soli’ get at the issue

_ because we are arguing about something which really

“ never was focused upon in Georgia. We are talking about .

| taking a concept, a legal concept, here and embéllishing,

if you will, expanding upon it, if. you. will, crystallizing

it so that it becomes a really effective vehicle. hate 26] |

(Rep.Tr. p. 31, lines 1- 21):

[Mr.. Becher] Now parens patriae constitutes, by

some slight. extension in this case, in our ‘judgment, the .

single most effective vehicle for doing that. It permits

‘the State, acting as Trustee, to. cover whatever may be

decided .to be ‘the’ measure of damage to recover some

meaningful amount in an instance where. the consumer

has been—and by consumer I am not limiting it just to

the motorist—I am talking about business entities, plan-

*¢

- tations and others where those people have wrongfully S..

parted with some money and, momen: by that wrong- :

fully wattle ‘injured the state in its economy, whether :

it is because they paid ‘less income tax or whether it was .

. _ because that money was taken out literally—whether the. ,

" money was actually taken out. of the State and. brought

back to the meinland or some other more esoteric form—

but if there was a price-fixing cgspiracy, and’ for pur-

poses &# this notion we have to assume that, and ‘if it

operated to extract that money, I don’t see how the Court

could . help but conclude as a matter of economic logic’

that there has been, adverse impact upon the State. et.

| 4° 31] S

(Rep.Tr. p. 32, lines 49):

. [Mr. Blecher] What we are really. sididne about, here is

some extension of the traditional concepts of parents [sic]

patriae. It does involve creativé thinking, new thinking -

and investigation. I think it is time the judiciary /ad-.

dressed itself. to this problern in terms of the ‘modern

needs of ‘a modern society. [R.T. 32] . }

(Rep.Tr. p. 64, line. 23 through p. 65, line 9):

‘ (Mr. MacLaury] » Under the - circumstances, Your

| Honor, I. say this is not @. proper class. It poses: more |

problems than it solves, and I join with Mr. Simon [R.T. -

_. 64] in saying that this action, in its present ay rae should. 3

be dismissed. — me,

We do- not say that there can’t’ be any class action ~

agpipst the oil companies in Hawaii. I don’t say there

can’t be any class action, but I say this one is not a

proper class, action. — :

The Court:. You are addressing yourself to ‘the one

before the Court and that is 0

Mr. MacLaury: Yes. [R.T. 65

- (Rep.Tr. p. 95, lines 16-24) : Be -

(Mr. Simon] That inthe ambi: Youp: Biesoe ths <./

issue is whether there is any possible way that you can %

"establish this’ class suit, the. one that is"aHeged in this ;

cofplaint. It may be that this plaintiff could allege a ,

— proper class. suit with a different class or it may be that

a different plaintiff could allege a proper class suit for

some of this class. But the only issue before Your Honor ay

toa is whether this class suit can ‘be sustained. ARS,

o5). -..-

(Rep’Tr, -p. 97, lines 11 through p. 98, line 11) : 7

The. Court: You urge the carving niust take place at -

' the time ofthe allegation. Mr. Blecher ‘says you get a

later date and carve up the classes. You maintain that the

carving must be at least the lines of the cleavage, must

. be set at the time the allegation is made? im +

- Mr. Simon: Yes, Your Honor. This is their see, em :

: They had complete freedoin to draw whatever classes they

chose, and they chose to see that the class was everybody

in the State of Hewali who buys gasoline. This 3 eir. .

choice. ~ anid:

Next he says to you , that he wouldn’t seal four sec-

onds on the question of whether the 600 service stations

in Hawaii create a separate question for ‘each, and yet I

say to Your Honor that there is [R.T. 97] no he can

avoid that question, because he says he is talkin

vertical conspiracy. If it was just a horizontal

of the three’defendants, we would have one problem. But |

. he says he is talking about a vertical conspiracy between

_ the defendants and every service station in the | ae

You can’t do that by a formula. ———e by mace,

® ° Asatte e

’ “ 1 ‘ eS . . - ° : : ~ . .

50 3 yt ° ° C3. ee . ¢

oo ee that the defendants conspired with each of them -

-. | whén their own complaint* ‘only says that most cof the -

. ‘people were involved. ‘The complaint doesn + even say all

ie f them. eT. 98) ee wa : ’

(Rep. Trp. 98, line 22 through p99, line 7):

| _Mr. Simon: = ntenice had a few words more to it.

This is a simple little, Jawsuit. if—and it is a big ‘‘if?’—

Your Honor, if all: that. is involved ti is ae Standard,

~ Union and Shell conspired onbids "to the StateThat is,

not a ‘case that involves ‘[R.T. 98] a gteat — of dis-

covery. It should be a simple case to try.

‘But it is a great deal different if you have to try the

question of whether 600,000 motorists buying gasoline at

600 different service stations selling six or seven different -

- brands of gasoline -weré all involved in one big con-

-spiraey. [R.T. 99] ee :

_— .

“ce : , °

a oe : _ . t =

. : . :

| | “Por The District of Hawaii

ee Wo. 2826 +

Plaintiff,

VB. ; |

. Standard Oil. Company of California,

~ Union Oil Company of California,

~ Shell Oil Company, and

Chevron’ Asphalt Company,

‘MEMORANDUM DECISION ON DEFENDANTS’ MO- -- \\ °

TIONS TO DISMISS OR ALTERNATIVELY TO *

STRIKE CERTAIN ALLEGATIONS OF COUNT :

ONE AND TO DISMISS | COUNT ‘TWO AND.

COUNT. THREE OF. THE wea eee: aa

COMPLAINT |

Plaintiff State of Hawaii i is seeking legal: and sanlbibde

relief from defendants” alleged. violations of Sections 1 .

and "2 of the Sherman antitrust ect.) Plaintiff’s Third

Amended Complaint alleges ‘three tcounts, as follows:

Count I charges injury to the plaintiff i in its proprietary

iin as the Beemaner of ‘refined otroleum prod.”

Title 1 USC. 661 and 2, ae ee

wots"? tiene. defendants; Ogies IT asserts ‘a cause of

| action. for the State of Hawéileecting in its capacity as

parens’ patriaé, and/or as trustee for-the use of its citi-

zens who, purchased refined petroleum: products ; ore

and Count Ipl pleads ' a class ‘action. under Rule 23, Fed. ,

R. Civ. P., on Behalf of plaintiff and “its citizens who —

purchased refined petroleum products. . . .’’* Defendants

have moved alternatively to strike se ile allegations of

Count 1, and: to dismiss Counts II and III. After exten-

sive briefing, and ‘argunient on December 13, 1968, this,

court (a) orally denied -defendants’ motion to dismiss

Count I as a sham, and (b)- took the remaining motions -

. under advisement. The oral ruling of December 13, 1963

is. herewith AFFIRMED. The court’s decisions oh the

motions taken under advisement are set forth below.

i % Motions To Strike Certain ANegalions of Count ; ae

Defendants would strike. paragraphs - 13 (dealing, with

the wholesaling of gasoline and the relationship between

defendants and their service-station operators) and 16 (f) *

(‘‘{Defendants] agreed to’ purchase or assign “import >

: quotas for-foreign crude and to exchange refined pe-

_troleum products among themselves . . . .’’) of Count I,

-and all references in Count I to ‘‘refined petroleum

. 8

- ~~ *Phird Amended cBimplaint filed ‘Septeinber 9, 1968° at page

7, paragraph 17. eet terse ;

3Td. ‘at page 7, paregreph 29. ger

, & ‘Id. at page 8, paragraph 20. .

5See motion of Shell Oil Company filed -October 15, 1968;

motien of Union Oil Company of California filed October 16,

1968: and motions of Standard Oil Company. of California and

Chevron — —* filed <pegeal M, 1968. :

resi

a. Paragraph 18 otis Me | oe ‘oP

_ * Defendants maintain plaintiff's sdanigated ‘Pegarding

defendants’ alleged control and domination of retail out-

lets are irrelevant since plaintift purchased gasoline on—-

direct bid. Plaintiff replies that its employees do.make —

_ occasional service station purchases. by credit card. Pri-

marily, however, plaintiff defends its allegations on the |

ground that Continental:/Ore Co. v. Union: Carbide € 7

- Carbon Corp., 370 U.S.. 690, (1962). precludes-fragmenta-

. tion of evidence proving the alleged violation.

| - Plaintiff has alleged a broad conspiracy to: monopolize

- and control sale and distribution of petroleum products, —

‘ particularly gasoline and liquid asphalt,’'in the State of _

Hawaii. Plaintiff contends that an integral part of this

scheme is .elimination of competing sellers and domina- <

tion of the marketing of petroleum products, which is par-

tially achieved by manipulation | of retailers serving the

consuming public. Presumably it is this control over all

_ aspects of petroleum product. marketing én Hawaii which —

_is at least one & the factors allegedly enabling defend-

ants to effectively rig eealed bids submitted to the. State:

- The court can not say at this stage of this proceeding

that the allegations of paragraph 13 are in no way rele-

vant or pertinent to plaintiff’s proprietary interests. The

- law permits plaintiff to explore into the totality of the

_ violation alleged. Plaintiff need not segregate and ecom-

- partmentalize the allegedly all-pervasive conspiracy into-—

solely those aspects having direct bearing. on plaintiff's

interest. Contmental Ore, supra. Defendant’s motions to

7 strike Count +1, pee | 13° are DENIED... ~

_B. Paragraph 16(f) ae _

Defendants contend they are precluded by law. from

purchasing or’ assigning ‘import quotas for foreign erude

oil imported into this country pursuant’ to the provisions -

of the Federal Oil Import Program. 6 Plaintiff conceded

. .that Count I, paragraph 16(f), is inartfully drafted, and

\ does not accurately state its assertions. Defendants’ mo-,.

_ ions to ‘Strike. Count I, paragraph 16(f), re Granted,

a without prejudice to plaintiff to amend its complaint and =

| "more precisely indicate its claims. ._ 2

xe Referénees T “Refined Petroleum Products’

Defendants_assert plaintiff’s interests do not ma '

to the myriad of pétrofeum | products other than gasoline :

_and liquid asphalt, and have moved thiat the. complaint. be

So limited. - Plaintiff has agreed to limit its discovery

requests to those two products. This agreement. is em- .

bodied in Pre-Trial Order No. 3, "Paragraph VS (filed

_ August 19, 1968), which provides: *

“Until further order-of the Court it is a -

that the term “refined petroleum products’ meéins

ane -motor gasoline and liquid asphalt only.’’

This ‘order of the court, adequately protects all of defend- |

ants’ legitimate: interests. ‘Accordingl¥, defendants’ mo- .

tions to strike all references to ‘‘ refined: petroleum had

_° vets’? in Count I are —

x? IL “Motions To Dismiss Count. I_Parens Patriae |

* Defendants assert that plaintiff has failed to state a |

y+ * cause of action as ‘parens — on behalf of its citizens, |

- " 632A Code Fed. Regs., OI Reg. 1, §7(b) ( ) 31 Fed. Reg.

- 7745, 7747 (1966).

and move that Count II of the Taisd“Amended Complaint ayy

be dismissed. Defendants argue that plaintiff can not

prosecute the claims of its citizens, in the guise of parens —

_ .patriae, since the State does not assert any interest apart

from, and. independent of. the alleged injury to its indi- —~ |

_vidual citizens. Defendants further content that even if

_ plaintiff has satisfied the requirements of a parens ‘pa-

triae complaint, its remedy is limited to whatever equi-

_° table sanctions may—be available and it may not recover

_ damages. Y ree oe used

Plaintiff responds in its brief and oral argument thata |

state may sue parens patriae on behalf of a substantial —

‘portion of its citizens to vindicate an antitrust violation,

which, because of its extensive-rature,-constitutes a public

wrong. Plaintiff contends defendants’ statewide pricing

conspiracy discrimipates against the'Hawaiian consumers,

thereby injuring thfeconomic well-being of the State over

and above the mofetary injury to the,individual ¢ eqnsum-

__ers. Plaintiff maintains: that all remedies. appropriate

under the antitrust laws, including that of treble* dam.

ages, aré available to the State of Hawaii in its capacity.

as parens patriae) The following, however, is the totality

of plaintiff’s parens patrige allegations in its complaint :

a “*18.* The above-named _ plaintiff, acting in its”

capacity as parens patriae, and/or as trustée for the

"6 GF His citineme who purchased refined petroleum

., ‘products; from any. defendant or co-conspirator

herein, realleges the matters set out in paragraphs

ol, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12+ 13, 14, 15 and 16

of Count One herein with the sAme force and effect

as though the allegations of each of said paragraphs

were set forth in full herein, | was

a . oH : — (56 & :

. oo SA9. The enlgwfal contracts, aisles con- —

“ spiracy in restraint ‘of trade, unlawful combination

ie Je conspiracy to monopolize, and monopolization —

ae y-.~ have resulted in the plaintiff, through its. respective ..

; departments, institutions, agents, etc. and in its citi- -.

zens, paying more for refined petroleum preduets a

than would have been ‘paid in a freely operating com-

- petitive market. Plaintiff has not yet ascertained the

precise Bacal a said damage to itself and its citi- *

zens, however, when said amount has been _ascer- ere

tained, plaintiff will ask leave of ee said.

“sum herein.’ & i —

: aS incorporated by refer- ©

ae jeals with parens patriae. : :

“In Georgia v. Pennsylvania R. Co., 324 US... 439. (1945), . the.

the Supreme Court ‘upheld the.-right of a state to sue

iar -parens patriae for: ‘redress. from antitrust violations in. ~

=. the setting of rail freight rates. The Court discussed the

(XA) prior law; summarizing and eogitying the seeabvonenis oe

ING for a parens patriae suit:

\*. .q “fT he interests of jhe State are ‘hot confined to

; those which are Propreetary ; they | embrace the so- as

ed ‘ ‘quasi-sovereign’ interests which in the words :

of Georgia. v. Tennessee- Copper Co., 206 U.S.. 230,

"237, -are ay sae of and behind the titles . oy

i. | ae

; citizens. . .

“TE seems - to us iad that er the authority of |

these cases rgia may maintain this suit as parens

” patriae. acting on behalf of her. citizens. .

‘Tf. the allegations of the bill are a as true, i

the economy of Georgia and the welfare of: her citi-

zens have seriously suffered as the result of this

* alleged conspiracy. Discriminatory rates are but one ©

_. form of trade barriers. . .". They may affect the

* prosperity and welfare of a State _28 profoundly” as

—

—_—

. -s

s. *

any diversion of waters from the rivers. They wii an

arrest the development of a State or put-it ata ~

decided disadvantage in competitive ‘Markets.

_ Georgia as a representative. ‘the public is pl

plaining of a wro

_ opportunities of-fier poor, shackles her. industries,

‘ her development, and relegates her to an

inferior economic position among her sister States.

These are matters of grave public concern in which

Georgia has | an interest apart from that: of particulgr

individuals ‘who may be affected. Georgia’ 8 interest

‘is not reinote; ‘it is immediate. ”? 324 US. at 44751..

| Pigintitt has | referred to various: factors enumerated i in

Georgia in its written and oral argument, but those fac-

tors’ are nowhere: indicated or suggested i in the allegatio ons.

of the com laint. Plaintiff has not even mers an in-

citizens’ claims, much less interest of its own

h, if , Proven, * limits the -

aside frém'the State’s: proprietary. rights. Thus, plain. .

tiff’s-Count II totally fails to satisfy the Georgia 1 require.

plaint usually need do no more than summarily apprise

defendant of the basis’ of plaintiff’s claims, Count IT is*

- deficient even by this liberal standard, and the court can

not incorporate plaintiff’ 8 argument into its pleading.

This court does not here decide that Plaintiff could or os

could ‘not properly plead an action for money damages as.

parens ‘patriae, in these circumstances, or - that. any sanc- .

‘tions might here be available under such theory. Rather,

this court merely . says that the allegations set forth in

- Count II" of plaintiff's. Third. Amended Complaint are —

insufficient to withstand defendants’ motions to dismiss.

Accordingly, defendants’ motions are _ Granted, without

so to Plaintiff to amend its & complaint.

ents. While. in this era of ‘‘sketch’’ pleading, &-com- .

- >

“9

-Ii. Motion To Dismiss Count III—Class Action - e

Count IIT pleads a ‘class action by the State as:the

" tepreedniative of its citizens who purchaséd refined pe-

troleum products. Taking .into consideration the context ae

of plaintiff’s” oral argument en Count II, this court views. <-

- Count IE: as, over lapping, parallel and/or. alternative to ,

the Count II parens patriae count dismissed above. -Ac-

" gordingly,’ the court will withhold ruling on defendants’

motions to dismiss Count III until. plaintiff has had an-

opportunity to consider | amending its complaint. If an.

amended complaint is filed, the court will rulé on any

” class action allegations, if any are then before ore if, in con-

junction with any . ruling which may .be made 0 on motions

‘related to. the amended complaint. Plaintiff is, granted;

fifteen (15) days from the filing. of this decision within.

"which to file an amended complaint, if plaintiff so desires, - ”

but if such is not filed, a ruling on the present. ‘Count TIT ae

will be fortheomirig iminediately thereafter. po

This memorandum ‘ decision constitutes: the ORDER of

. the court in the particulars set forth above. ; ae

“DATED: “Honolulu, Hawaii, this 24th day of February :

1969. : |

jaf Martin ‘Pence

_ United States District’ J judg :

; \ : ” ig ,

P a - .

| oe vie . §9

—__ aa

i __\ [Feb 1960) .

[Title omitted iy printing)!’ <)° EOE RSD

: -FOURTH AMENDED .COMPLAINT

> we A : - 8

isn {Sherman Anti-trust Act)

ee _ (Jury Demanded) ae

* The above-named plaintiff files’ this complaint against ©

- i above-named defendants and, demanding trial] by jury, ©

complains and alleges as-follows: 2 | 3

COUNT. ONE. EWES ae or oe

fs Jurisdiction dhil Venue, Be Ss ae

1. This complaint is" fled qd these proosedings are - |”

' instituted against ‘the named defendants under Sections

4: and 16 of the Clayton Act (15.U.S.C. 12, 26), to secure .

a damages from,-and injunctive relief against, the named

mee, defendants for violations of the antitrust laws as herein... -

“ aftet alleged. sdiiguoi ara

"2, Each ‘defendant ‘maintains an office, transacts busi-

"ness, and is found within the District of Hawaii, andsis

Within the jurisdiction of the Court for the purposes of :

_ Service.” as ‘ SG Sue

—

3. The State of Hawaii is one of the sovereign states ~

which through its various departments, ‘agencies, institu. he

_tions, universitiesrand boards has been a substantial pur-

including without Peay

_ limitation, motor gasoline: and asphalt. . teat” AP : ;

° 4. ‘Standard Oil Company of California (hereinafter, ©”

. Standard), a Delaware corporation; with its principal

’ dias

‘ . .

* A _ * e “a. - °o

o < . - id

we?

named a defendant herein,

7 defendant herein.

_ ‘after alleged. _

offices located in. San Francisco, California, here

5. Chevron Asphalt Company (hieredfter, Chevron), &

| Delaware | corporation, with: its principal offices in San

_ Francisco, ‘California, a wholly-owned subsidiary of

Standard Oil Company of California, hereby: is named a

“6. Union Oil ‘Company _ of California (hereafter,

ot Union)) a. California corporation, with its principal. offices .

~ located in Los. Angeles, California, hereby. is named a!

defendant herein, :

7... Shell Oil. Compagy” (liereafter, Shell) a. Delaware:

corpdratién, with its principal offices located in New

: York, ‘New York, hereby is named a ac: Vem

s a 2. a e

wo 4 | Co-conspirators

8. Other persons, firms or ‘corporgtions participated as

co-conspirators in violation of’ the anftrust laws herein-

Nature of Trade ‘ad Commerce

9. Each oftthe defendants is an integrated oil’ company ;

engaged in the business of purchasing and producing’

_erude oil, transpotting crude oil and refined petroleum ©

pfoducts, refining crude. into refined petroleum products

“and in the wholesale and retail sale of refined —— . :

"products. Te 2%, ave tag

SOE

10. The only commercial oil: ieee in the ‘State of 7

‘Hawaii is owned by defendant Standard. Substantially all a

'. of the crude oil refined at said” renaey is imported. os,

7 ee “6k

$~ . , ‘ : ia

Hawaii, under. applicable Federal eS paeeny ;

from Far Eastern countries. : | |

“Ul. The’ refined petroleufn sects: inckading motor |

2 gasoline, produced at said refinery are distributed by de-.

fendant through service station and other outlets most of

‘ which are operated by lessee” dealers. Some, refined pe-

“‘troleum products are sold by Standard and/or Chevron

directly to Federal, State and Municipal go ment

| agencies.. Substantial quantities : of motor. gasoline\ are

shipped from the Hawaii refinery to the mainland for sale~

and distribution there. Finally, Standard Supplies refined

“petroleum products. to the other defendants and other

major integrated oil companies for their resale lier e

| distribution in Hawaii. +

12. Each of the defendants Sips refined ‘petroleum

_ products, including motor gasoline, from the mainland to

Hawaii for resale and/or further distribution “in Hawaii

or elsewhere. -

13. :Motor masoline represents approximately 90% (in

> terms ofdollar value) of the refined petroleum products

sold by,each defendant through service stations. By means

of various provisions in their leases, subleases ‘and supply

contracts: with service station operators, and in. other “- <

ways, each defendant has been able to and does dominate

cand control thesmanner in. which independent service sta-

- tion operators conduct their respective businesses. Each - .

defendant effectively coptzols the ‘price at which most

dealers sell gasoline; each controls the hours of operation :

of ‘the. independent dealers ; each controls the details of —

bookkeeping, accounting: procedures and. records; each .

-. controls the manner in which. the “dealer displays and e

advertises — as well as the * Ups, quality and

,¢

- meee |

- brands of automotive accessories and miscellaneous mer- °

- chandise and the price thereof which the dealer | jiandles

and sells and many other details of the dealers’ business |

: affairs’ Each defendant\compels and controls dealer par- -— :

- ticipation in regional, national and loeal promotional pro-: ” :

grams, such as the giving of. stamps, ‘steak knives, glasses

_ and game tickets. This domination and control over the

dealers is_ enforced by each defendant through a system

- of policing which subjects: the dealer to inspection, sur-

veillance and naresamnent by dealer representatives and :

others. ro ;

se. 14, During the =a covered by this amended com-

plaint there has been.a continuous and regular flow in

«>, foreign commerce of crude oil obtained from. sources out-

side the State” of Hawaii through: the Standard refinery

in Hawaii producing motor gasoline and other refined

petroleum products sold to service stations and others in

Hawaii and on the mainland.

| x

Vv |

Offenses Charged

15. Beginning at a time unknown to plaintiff, and con-

‘tinuing thereafter up to .arid Gncluding the date. hereof,

defendants entered into unlawful contracts, and a combi <j

nation and conspiracy in unreasonable restraint of trade

and commerte in the sale, marketing and distribution of .

"refined petroleum products and said defendants have _

combined and conspired as herein set forth to monopolize,

and said defendants have monopolized such trade and

commerce in violations of Sections 1 and 2 of the Act of

Congress | of, July 2, "1890, commonly known as the Sher-

paw hot (15 USM Sections 1 and 2). rat - a

16. The aforesaid contracts, conibination and conspir-

acy to restrain trade and commerce, and the combination .

and conspiracy to monopolize and the monopolization of

such trade and commerce, \have consisted of a continuing « “

agreement and concert of action between defendants the |

substantial terms, purposes and. intent of which have

been that said defendants and the co-eonspirators :

(a) agreed to fix, stabilize and establish unrea-

sonably high wholesale and resale prices on motor

gasoline and other refined petroleum products;

(b) agreed to maintain and — resale. prions

"on meee gasoline; - :

. (ce) ’ agreed to fix, stabilize and Saubdiake unrea-

sonably high prices for liquid asphalt;

‘(d) agreed to rig bids on the sale of motor gaso-

line, liquid asphalt and other refined: petroleum prod-

ucts to the State of Hawaii, its political subdivisions,

or to contractors submitting bids to the State and;its

political subdivisions ; . By . 3 Pee

(e) . agreed. to rébirict the number of refiners of =

crude oil in Hawaii; 5 |

- (f) agreed . to exchange import duntas for. foreign

| " erude and to exchange refined petroleum products

among themselves : in ‘order to: (i) exclude actual

and/or potential competitors, and d Cif tmaintain high,

arbitrary prices ; |

-(g) agreed to price Anes petreleam: products i in

Hawaii on the basis of posted. crude oil prices on the

mainland even though most of the refined petroleum

products sold in Hawaii are Produced from lower .

‘priced ha ean

: -

care Sol

faire To Plaintiff

17. The unlawful contracts, combination, conspiracy in

4 Testraint of trade, unlawful combination, and conspiracy .

= monopolize, and monopolization ‘have resulted in the

plaintiff, thréugh its respective departments, institutions, _

_ agencies, ete., paying more for refined petroleum products

than - would have been paid in a freely. operating com-

_ petitive market. Plaintiff has ‘not, yet ascertained the

- precise extent of said ° damage. However, when said

amount has been ascertained, plaintiff will ask -lepve of.

Court to insert said sum herein.

. | : "COUNT TWO

is, " ‘The facts alleged in paragraphs 1, 2, 4, 5, 6 7, 8

. 9, 10, 11, 12, 13, 14, 15 and 16 of Count One are realleged

with the same force ‘and effect as: though the allegations | 6

of each of said paragraphs were set forth in full- herein. * |

_ - 19, The State of Hawaii,-acting through its Attorney _

General, brings this action by virtue of ‘its ‘duty to protect .

' the general welfare of the State and its citizens, acting

herein. as parens patriae, trustee, guardian and repre-

sentative of its citizens, to recover. damages for, and.

secure injunctive. relief against,. the. violations of the anti-

_ trust laws hereinbefore alleged. ;

20., The ceil contracts, combination and ‘con-

spiracy ‘in restraint of trade, ‘unlawful combination and

conspiracy’ to monopolize and monopolization, ‘hereinbe- -

fore alleged, have injured | ‘and - adversely affected the

economy and prosperity of the State of Hawaii in, among

e » others, the acct 3 ways: 2. rk

_ st

(a) revenues of its citizens have been wrongfully

éxtracted from the State of Hawaii; aR :

- (b) taxes affecting the citizens and. commercial

f . eee

entities have been. increased ito affect guch losses of

revenues. @hd income; | baton 1

mn (i opportunity in manufacturing, ‘shipping and

commerce have been’ restricted and curtailed ; |

(d) the full and complete utilization of the natural .

wealth of the State has been prevented; : 7 |

(e) the high cost of manufacture in Hawaii has | ~

_ precluded goods made there from equal competitive _

_ access with those of other States to the national mar- .

(f) measures taken by the State to promote the

general progress and welfare of it people have been

-(g) the Hawaii economy has been_held In a state 7 ge

of. arrested development. | |

21. Plaintiff: has not yet ascertained ‘the ‘precise extent

of said damage to itself and its citizens ; however, when .

said amount ‘has been ascertained, plaintiff will ask leave

‘of Court to insert said sum herein. : oe

> + COUNT THREE | |

22. - The above-named plaintiff, acting on its.own behalf

and on behalf of its citizens ‘who purchased refined pe-

troleum progucts from any or all of the above-named |

defendants or-co-conspirators, brings this action, individ-

ually and pursuant to Rule-23- of. the Federal Rules of

' Civil Procedure, as amended, as the representative of the

- aforesaid class, to obtain damages from, and equitable

: 7

. relief against, the above-named defendants and so doing, ;

plaintiff realleges the matters set out in, paragraphs 1, 2,

. 8, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15 and 16 of Count

~~ One herein with the same force and. effect as’ though the.

allegations of each of said paragraphs were set: forth in

full herein.

.23.. The nature of the offesues serge, commerce .in-

yolved, and relief sought present substantial questions of

- both law and facts common to the named plaintiff and to |

all of the members of the class. Because of the large

. number ‘of citizens ‘of the State of Hawaii. who have pur- ~~

chased ‘motor gasoline and other refined petroleum prod-

ucts from the ramed defendants and/or their ‘retail _

dealers and other co-conspirators and because of the

| expense and burden to. the parties and to the Court of

litigating their claims separately, it- is impracticable to” .

bring them all before the Court. The named. plaintiff,

however, fairly insures the adequate representation of the .

ae interests of - the entire class. :

24. The unladtul contracts, combination, conspiracy in

restraint of trade, unlawful combination and conspiracy

to” “monopolize, and: amonopolization have resulted in the

plaintiff, through ‘its respective departments, institutions,

agencies, etc., and in its citizens, paying more for refined .

: petroledffi products than-would have been paid in a freely

operating competitive market. Plaintiff has not yet ascer-

tained the precise extent of said damage to itself. ahd its

: citizens; however, when said amount has been ascertained,

_ plaintiff will ask leave of Court to insert —_ sum herein.

Wheref ore, plaintiff prays:

1. That the Court adjudge and decree that the de

fendants (a) have combined in restraint of trade and

commerce hereinbefote described’; (b). have etched to

monopolize ; (c) actually have monopolized the-trade as

| Sonera il described in violation of Sections ! and 2 ng |

_ ascertained, be frebled aa. required’ by Section 4 of the 3

67. |

the Sherman Act;

2°° That. plaintiff recover: its, damages, with iii

Clayton Act;.

3. That plaintiff recover, as ‘nidebio’ or as representa

tive of. the above-pleaded class, the damages sustained. by ;

its ‘citizens, which, . when ascertained, be trebled as re-

| quired by Section ¢ of the Clayton Act;

4. That defendants and each of them be enjoined from -

continuing their unlawful conduct ;

. 5. That plaintiff be awarded reasonable attorney?

fees as provided by. Section 4 of the Clayton Act; and

6. That plaintiff recover the costs of litigation as_

provided: by Section 4 of the Clayton" Act. f

| _ Dated: February 27, 1969

= STATE OF HAWAII

” By Bert T. ‘Kobayashi .

Attorney General eee

oe” . Gilbert K. Hara ee

q Patricia Kim Park

_d oseph Kinoshita

, Deputy Attorneys General

: Sonu L. Alioto

_ Maxwell M. Blecher *

Francis O. Scarpulla

By /s/ Maxwell M. Blecher |

(Cortifiat of maillpg omitted in printing}

[March 1, 1969]

[Title oxaitted in ; printing] |

: STIPULATION |

| It is kereby stipulated by and between the parties

- hereto:

1. that: the motions heretofore addressed to Counts _

‘Two and. Three of’ the Third Amended Complaint be -

‘deemed to be addressed to the Fourth. Amended Com _

plaint; , ?. *

+2. that defendants shall serve ‘and file any further

memoranda of points and authorities with respect ‘to the

road Anienied — on or before Apel 18, 1969;

3. plaintitt ‘shall 1 serve and file any sospnmaive memor-

andum ‘on or before May 12, 1969. | |

: Pillsbury, ‘Madison & Sutro

-Francis R. Kirkham’

‘Richard J. MacLaury.

Daniel H. Case, *

Roy A. Vitousek, Jr.

By /s/ Richard J. MacLaury ’

Attorneys for Defendants

* Standard Oi Company of Cali.

‘fornia and ere Asphalt Com-

. Dungan

By /s/ Malcolm T. Dendy 3

Attorneys for Union Oil Company |

: of oN

_ Howrey, Simon, Baker & Murchison .

‘Willdam Simon. 7

'. Richard T. Colman .— :

_ By /s/ Richard T. Colman

OM eee

‘. — Joseph L. Alioto ae

t 2 . Maxwell M. Blecher

By /8/. Maxwell M. Blecher _ so. :

_ Attorneys for. Plaintiff +H os : ie

_It is so ORDERED. this 19th dey of March, 1969. Ss

_ /8/ Martin Pence’ . .

Judge of the United States District Court

[Certificate of service omitted i in printing]

; : :

RS i 3.

"a eg > , ©

oes - °«

* « EXCERPTS FROM REPORTER'S TRANSORIPT -

DATED MAY 29, 1969. - ~

| (Rep.Tr. p. 74; lines 16-25) : ee ES

[Mr. Blecher] Count ng of ‘the pitgesed complaint

_ alleges a parens patriae. claim. A he, pro patriae claim

. alters. nothing in the context of the interest of the’ jurors:

- or the Court. The parems patriae claim, if, as we respect- -

| fully submit it should be,” it - ‘is sustainéd, “by” this Court

does no more than increase the prospective. monetary re-.

, covery to the State. It adds no new parties. It changes 1 no

substantial issues. ”

So far as the cléss action i 1s. ocsworned, should the Court -

elect, either duplicatively, partially. duplieatively or. alter-

natively, the. parens -patriaé sustains the class: action.

[R.T. ve or fi ee ,

(Rep-Tr. p. 85, line 22 ihrongte p. 86, line 12):

- [Mr. Lasky] But let us turn exactly to the argument

_ he: makes in trying to support his parens patriae argu-

-» ment, and I can sum it up in about ty two seconds, it is, |

| oshall these wrongdoers, Shell, Union ‘and Standard, who

have wrongfully extracted from TR. T. 85]. the pockets of

the people, every citizen of this State, $14 million go un-.

whipped of justice and be permitted to keep tha? loot + ‘in

_ their’ pockets! No, says he, your Honor shall create a

new rule of law and take that loot which we have ex-°

tracted “from the people—from” you and you and you in

Hawaii-—and. put it in. the treasury of this State where. it

will end redound ‘to everybodys benefit.

_., The Court: That isn’t parens patriae as I read it, -

. though, Mr.’ yay | 3

. “~~ . ° 7 ~

I= : . &

7 - Mr. Lasky: No, your Honor, and that’s gWhat we shall pit

. say when, as, and if ‘we argue’ the parens patriae point, —

but it is what-he claims is parens patriae. PRT. 86]

(Rep-Tr. p. 95,.lines 4:17):, es Oy tina kee

Mr. Sinton? ~But most of them are not} accurate.-I give

_ you. one example, and this-ig a typical example. He said .

.. that we buy our gasoline from Standard. Now, thie is -

. , not true. We do not buy any ‘gasoline from Standard. i

“is true that some of the gasoline that Shell. sells in the

_ _islands—not more than half—@®mes from the Standard

refinery. But we don’t buy it from them; we exchange it

‘from them: And. there’s a big difference, your Honor, -

because, for every gallon of - gasoline we give them, they

| give us here. We give them a gallon of gasoline in the .

California ared, and that gasoline costs us what California -

_ » gasoline costs us; So, it isn’t a question of buying it from é

them here; it’s a question of giving them in exchange a

gallon of gasoline. There’s a real: difference. [R.T. 95]

(Rep.Tr. p. 103; lines 9-18): oe

[The Court] We next come to the’ matter of .pareis -

patriae—parens patriae as pleaded, not as argued but as

pleaded:This will come up perhaps later. As pleaded, it

~ gives me no more. interest in the outcomé'of the case than

. I would have if Both Counts II and It were out. Count . “

~ IIT must be couched under parens :.patriae on the basis

_ of an ‘economic injury to the’ entire State. It is not +

couched, as I read it,-upon the individual losses of any.

user of gasoline: It is the ‘economy of. tl@® State which —

must be injured; not the personal: loss : of any one indi--

. Ae ° e

i ‘ Se :

* vy "ee . .

: . : . Y aS: or

& trea wz

te . : MEF

; 2: ies . .

a s

(Rep.Tr. p. 104, ‘ines. "10-17) : |

» In the event that Count tr is , allowed: to remain; we

- might and may have a different problem. As to Count IT,

_parens patriae, if that were to remain, there is ne problem

—no problem with’ any juror anymore than. there would .

’ be any- ‘problem, as I’ve indicated to yéu; with the judge, —

because parens patriae is couvhed on. the injury .to the

total economy of ‘the State. It’s not upon the individyel

economy or financial pocketbook or loss of any a -

" , individual. [B.T. 104]

(Rep.Tr. p. 121,. line 3 ‘through p. 123, line 18) :

-[Mr. Kirkham] - Now, I want to close with one thought

. that really the only argument that has been made by Mr.

Blecher on this from beginning to Gnd is the argument

| that Mr. Lasky, rather emotionally and much better than

I could, summed up @ moment ago, “Is this Court going

~ to let these companies take! a lot of money away from

-_ these poor people without: giving them a remedy.”’

Well, the remedies that the Sherman Act has provided’

and the remedies that have been developed i in the develop-

_. ment of our law: for 75 years have, I think; not been too -

ineffective. I don’t want to be facetious but ‘T’ve been an “

opponent of Mr. Blecher in enough cases to think that,

there certainly are ‘remedies available. i

Uknow of 15 or 20. suits. pending, ‘and I’m a little bit —

hesitant ‘to say this and I don’t want to but I will, against

the oil industry throughout the United States.and many

of them are class actions. There are actions pending in the

East that involve the public bodies of the States of Dela-

ware, New Jersey and Pennsylvania. There are actions —

: [R.T. 121]

13 | os

- peading on. the West Coast—Mr. Blecher. j = connected with

that—that are class itions. wil doggatatt ©

There is,no. problem of remedy. here. The class action:

provides a remedy if it’s an appropriate class action.

Po.

Now, in this case, the plaintiff at the: ‘very begining

started out and said. I want every citizen who has- -pur-

chased refined petroleum products in .the State of aol

to be ‘brought i in here as a class. Now, he hasn’t receded °

from that one inch, although. our pdsition has been, as

stated by Mr.. MacLaury at ‘the outset, that we are

objecting to that class. We are not saying that a proper

class cannot be named in this suit and more particularly, .

perhaps, in another suit, and it Would avoid the problem...

“that Mr. ‘Simon raises with respect, to the. status of the

State as an individual of its- own neal not representative

of any class.

But there is- no quéstion at all but what an > appro-

priate class action can be brought. ‘And what has hap-' -

pened here is, as I say, Mr. Blecher started out with that

one class action; he hasn’t receded from it. He started

- out with the parens patriae action to-go as a parallel to it

so the Attorney General will recover all this money, and

he has completely ignored the fact that remedies are open

under the law, adequate remedies under the law, that

completely obliterate the imaginary horrible that he sees.

~ He doesn’t: have to. sue on behalf of every citizen. of

- Hawaii that, makes a completely impossible, class. And if,

some of the efforts that have gone ip our battling these

matters. before your Court, your Honor had gone into

taking a look at what the facts are and seen which ones

we, 2 eo

_ of these people belong”to’ a class and which ones [B.T.

122] have like DNpblems, then the law supplies a remedy,

and you don’t have to stretch and’ distort a unique and

'. very special remedy like parens patriae in order to reach

’ something: that the law already gives him a ‘chance to

reach. | cp ee

top I believe I said. earlier, I don’t ‘even think it presents

a substantial question to ask this Court té make every |

citizen of Hawaii that has bought refined petroleum prod-

ucts a member of the class, and the many, many, many,

_ many reasons for that, have been set out in the argu-

“ments: that have gone on before ‘this. It’s on an analogy

of the ‘Supreme Court of the United States refusing to

take jurisdiction of a State Court when there isn’t a sub- :

stantial Federal question involved. It. goes to the juris-

“diction. . : ge!

. I don’t think a substantial question is presented, but

I urge, and strongly urge, and this Court, certainly with

its vast antitrust, experience, realizes ‘instinetively that

‘there are remedies that are available’ and a little pit of

effort can get that remedy. [R.T. 13} . : —

(Rep. Tr. p. 129, line 21 through p. 131, line 10):

The Court: I know what was the issue there but I’m.

taking the broad context of what was said to the Court.

You tell me now how you would react, to the argument,

which undoubtedly would come, -what were they referring

: to there but ““the business of the State, the- economy .of

the State, the [R.T. 129] property of the State, the in-

tangibles.”” | oS |

Mr. Simon: Of course, the economy of the State is

quite a different matter than the business of the State. |

ade e as

‘/ a +e e

15 if

What was iuveleed in Georgia was the iis that ta-

tories. would not locate in Georgia because of the discri-

minatory freight rates whith favored Northern locations.

The Court: So the State was) thereby injured because “4

_. it couldn’t make the mine, the factories couldn’t develop,

they couldn’t get their taxes, ‘60 On. Am I wrong?’ -

Mr. ‘Simon: You. don 2 ¥ collect taxes, of course, from

nonexistent factories. On the other hand :

The Court: Presupposing you were ‘able to show the -

‘but for’’?

Mr. Simon: But for the’ economy of the State, your

Honor, might have been affected ; but thé business of the

State, the property of. the State would not. The economy

‘ ‘of the State is the standard of: living of its people. The .

level of the economy, ‘the gros income, er the gross

. national product, the gross State product, this i is.

-The Court: And that’s reflected how?

Mr. Simon: This is reflected by...

- The Court: By taxes.

‘Mr. Simon: That’s one factor. The gross thoduet of

. the State is another factor. The standard of living of .

the people is another factor. The average income. of the.

people [R.T. 130] is another. factor. But these. aren’t fac-

tors that are damage to the business or property of the . .

»State.. They are factors which, in Georgia, the Supreme

Court said the..State could: protect because there was.no -

tne else to protect them. The nonexistent factory couldn’t -.

claim. damages because he hadn’t built thé factory, and’

. what Georgia. was seeking to do was to eliminaté dis-

¢timinatory rates that would bring new factories to the

| State. ‘But there is nothing in that opinion and - your

- Honor will recall that in the brief, the Attorney General

oes

. ig,

“~

16.

of Georgia admitted that they couldn’ 4, collect anoney 5

damages. [R.T. 131] ) u

(Rep. Tr. p. 149, line 13 through p. 156, line 18):

‘The Court: Well, we have all had ‘plenty of oppor-

tunity to decide. whether parens p is a) proper count

in this .case.- I have studied the ‘probiém, aided and”

, abetted by the very, very great educational argument pre-

sented both in writing and orally by all counsel here.

‘T take .into consideration the words of Justice Holmes

just quoted and hope what I have concluded indicates |

that I have an ability: to read English intelligently.

Were it not for the words of Justice Douglas in that

Aivided-Court decision in ‘Georgia versus oPennsylvania

| , the problem would be simple, because, going

down. through the cases. that have touched upon parens .

' patriae and its use in the field of law, it only involved

_ equitable relief. [R.T..149]

It was only basically, in Georgia versus Pennaylveiile

Railroad and some. of the words perhaps in North Dakota-

"versus Minnesota, and, if you want to look at it back-

‘wards, perhaps Okldhoma versus American Book, you'll

find any ‘inferences that parens patriae would be a proper

count in a Sherman 1 action for damages, I mean, injury

>. to business or property.

The amended bill $f complaint in Georgia versus Penn-

sylvania asserted four counts of injury. The third and

fourth, as you well know from having poured over this

one yourself, sought treble damages for alleged -discrim-

: inatory freight rates charged the State and its citizens.

Now, i in its supporting brief, as you correctly pointed out,

- Mr. Kirkham, page 8, the State of Georgia indicated it

was not primarily interested in seeking damages for past

i: a

- 5 ° : °

_ injuries to the - State and its citizens,‘ but is primarily on

interested in the futuke welfare - - State and its

people. . OS SS

it appeared to me, as I read this, tisnie Delphic words

of the Supreme Court, it appeared to me that the. Court:

~ held that Georgia had properly asserted a cause of action

- for both injunctive and damage 6lief as parens- patriae

as well as proprietary—that’ s. the way I read. it—and

_ permitted. the bill of complaint Svolying tae “Court’s . ar

‘ jurisdiction’ to be filed. “Sa 9

These words, which all of you have had a chance —

to [R.T. 150] read and analyze, Mr. Blecher said they

mean | counsel urge they mean that. I’m’ the man

. looking at. them from . the middle and this is what the

Court said. You’ve heard it and you’ve read. it. I’ m .

going to repeat it for my pwn benefit as well as yours.

« ‘*Georgia, eaing—for her own injuries, is a ‘person’

within the meaning of Section 16 of the Clayton. Act; she

is. authorized to maintain, suits to restrain violations of

the anti-trust laws or to récover damages by. Treason

to protect only her proprietary interests. The rights

which Georgia asserts, parens patriae, are those arising

from an alleged conspiracy [which] =e the —T

of Georgia.” . .

I’m jumping along, ‘‘when it ‘came to: other sanctions

Congress * * * authorized civil suits not only by the —

_ United States but by other persons as well. And we

“find no indication. that, when Congress. fashioned those

civil remedies,’’ these are my own mental underscorings, .

_. “it restricted ‘the States _ to suits to ‘protect their pro-

prietary interests. Safts by a State, pareng” patriae, =

jong been recognized. There is no apparent reason: why

———

) =

Ls)

Co.

- , * those suits should be excl f f rom the pecrew -of the

= ti-trust acts.” i

| ae is it to be davtowed: to say that | purview of the

a _. injunctive _provisions of the. antitrust acts? Should that

be insterted there, because “all of the other cases-covered

. only [B.T. 151] injunction, and naturally that was ‘all

- that Georgia finally decided that it. wanted here. Was

: that what the Court was saying? -

~~ And the Court continues on page 452:

| _ *Sinée the claim which Georgia asserts as. parene

> patriae as well as proprietor meets the standards of

justiciability and since Georgia is a ‘person’ entitled to

: enforce the - civil sanctions,”? that’s my ‘underscoring,

the civil sanctions,’” albeit plural rather than singular,

but it’s there, ‘‘of the anti-trust laws, the reasons which

have been advanced for denying Georgia the opportunity _

to present her cause of action to this Court fail.”’ |

a don’t think I need to go into Keogh versus Chicago

~ and how that limited the recovery and so forth. :

~—_Qne- might argue that the State of. Oklahoma versus

American Book Company, in 144 F.2d 585 is not to. the .

= contrary. I will not go into that. I’m foreed to write @

oe. eo "ae in this case. It is never my desire “and I always

| reluctantly undertdke a, ‘‘monuméntal decision.”” I re-

member. my first monumental decision. The Supreme Court

_ reversed me. They may ‘do so in this.

Because of the hour and because this is a rain which

will demand a fuller pues ean I = simply. rule -

at this time:

_ As I- read Georgia - versus Pennsylvania Railroad, I.

_~ [R.T. 152] can conceive that there can be such a damage _

to the economy of a State apart. from its strictly’ pro--

_Peetary loss, but a pe caneee to the economy which is

ei)

eusoxptibie to proof ani. translatable into money, dollars,

cash. » :

- And, when I read, as: you. aa too, “the economy of

- Geos and the welfare of her citizens have " seriously. :

suffered as the result of this alleged conspiracy. Discrim-’

“jnatory rates are but one form of trade rriers. They

may causé a blight no less serious than the spread of

noxious gas over the land,’’ which, of course, would be

destructive, ‘‘or the deposit of sewage in the streams,’’

which might, again, be destructive to the over-all economy .

“of the State. “They may stifle, impede, or cripple old

industries’ and prevent the establishment of new ones.

They may arrest the development of ‘a State or put it |

_ at a decided disadvantage in competitive markets.’’

I.ean conceive that it would be possible, under Bigelow,

at least, to offer some basis of proof which could : estab-

lish a damage translated in dollars to a State because

of the, alleged conspiracy to ‘the: entire economy of the

State, I mean, the alleged conspiracy «and — to the

entire economy of the State. ;

So, I will rule that the parens patriae, as pled, is not

subject to dismissal because it pleads a.good cause of

action in the context of this case here. [R.T. 153] ;

Now, Tm going te . . As I say, I’ll have to write

this. Don’t expect it tomorrow. Insofar ~as the class |

action, you don’t need to argue, not because I rule this

way because I was ready to rule there in San Franciseo

on the class action. | ar

Judge Harris is an able J udge, ‘conceivably mal more

s able than I. When he wrote the Chicken Delight. case; .

he said what he thought a judge could do. As I see the

_ present pleadings and pleadings in the proprietary ca-

pacity, there are two'factors. Hither the State is-plead-

te woe

~ ing in the proprietary capacity as a wholesale buyer, or

buyer of wholesale, or is pleading as a buyer of retail.

Now, we know that when it buys at retail, say, over

on the island of Molokai—somebody found it easier to

go to a service’ station and spend the ‘State’s money to

buy gasoline—now, if they say that because that took -...

place that we are: now ready to take on and give the

Court the horrendous problem of every: last7one of the

- individuals throughout, the State, or whoever were here

during that period, who purchased gasoline at retail, ands |

take on the burden of determining how much each and

- every one should ultimately be entitled to who finally came.

in under the class, I state that.I see so. many, many proéb-

lems—those who have been here and gone; those who

bought 5¢ or $50 or $39.70, whatever it might be over a

period. Even if you were able to say that, well, everyone. .

"of them had a credit card, which is not true, we know,

[R.T. 154] so all we’d have to do is grab the records of

these various companies, and just take all the credit card

| listings, and so forth, gentlemen, even if it were that

way, I would hold that,- under the circumstances right

now, the class action based upon the injury to every in-

dividual purchaser-of gasoline. in the State, to me at the

present time, in the context of the pleadings, ¥ would be

unmapageable.

‘Shan'inet'peapeved ai this time to go. ahead with the

_class action as counsel has pled it because I feel that it

would be unmanageable under the _—— context of the

case. 7 .

Tho uotion to. diamino Count: TIT ia ‘grkated; Yrithout

prejudice, however. If. you can come up sometime later

_ with something that the Court feels that the Court can”

- manage, we'll reconsider it. .

; 7 . 7 v\

Now, it'e 4:10. We'll take a ie: minute recess “_ I

7 think. we can dispose of the other matter in not too 0 long €

a. time and get through this afternoon.

(The proceedings recesSed .at 4:12 P.M. and recon-~

; vened at 4:23 P.M., May 29; 1969.)

_ Mr. Kirkham: May. it: please the Court, in the argu- *

ment. of Mr. Laskey’s, he recognized that he misspoke

himself as te the ruling and did say that he thought it

was an appropriate ease for certification.

The Cour® I had-just informed’ my legal eagles here.

that, if the motion for: certification were again urged,

[R.T. 155] thas\ I probably would feel it was in order.

_ Mr. Kirkham: Thank you, your Honor.

The Court: And since now this statement. allows: me

to take up the one that I passed, inasmuch as we’re

going to have ce era of one problemy you might as.

well have certification of twe. I think they can both be

“disposed of at the same time. Sd, the motion for certifi

‘cation under 1292(b), the motion for change of venue,

is granted; the motion for certification’ under the. same

- section for a parens” “patriae count is likewise granted.

Counsel will prepare the . necceeery orders. and Tl - sign

the same.

Now, -do you want ‘certification of your dlass action? \

Mr. Blecher: No, your Honor. I simply want to in-

quire so our records are right.@I think 1292(b) requires .

that, within ten days from the entry of the order from

_ which certification is taken, the. matter will be. taken up

with the” Court. of Appeals and a petition -an be pre-

sented to the Court of Appeals. Is that time running

from the order eT [R.T. 166)

- 82.

pial -Wigade lat {July 4, 1969]

In the United States District Court |

for the District of Hawaii

ps aes tiie dose

pow Civil No. 2826

Plaintiff,.|

- Shell Oil Company, ck

, _ Chevron Ajpies Company, ) = |.

; ‘Defendants.

fe DECISION ON ‘PLAINTIFF'S

he State \ Hawaii ‘brought this antitrust action

against three oil companies and a subsidiary of, one, <_

alleging in Count. I of* its Fourth Amended Complaint,

basically, that. the defendants violated Sherman 1 and 2 :

by bid rigging, price fixing, market monopolization, and

_.other acts fn restraint of trade, and asks ‘for damages |

‘based upon. the illegal éxcess prices paid for ‘defendants’ |

products by ‘the. State in its. Sea capacity, as’ &

“buyer of petroteum products. 2 bagh

| In Count’ II the State’ ‘brings this action ‘by virtue ‘oF

"its duty to protest the general welfare of the State and :

its, _citizens, acting herein as parens patriae, trustee,

guardian, ‘and representative of its citizens, to recover

damages for, and secure earns relief —_. the

: violations. of the. antitrust laws heceinkeforé

Plaintiff continues, to allege “Phat the combinstio and

| _ conspiracy of the ‘defendants in restraint of trade “and

a % 5 7 ou ps ee)

eee Spent si.

; 83 " ?

. r] ig

: 791

to monopolize the sale, marketing and’ distribution of . %

refined petroleum products has ‘‘injured: and adversely

affected : ‘the economy , _ tea tad of the State of

Hawaii” by:

dar oy (a) revenues of its citizens bain heenwrong:

Sais fully extracted from the State of Hawaii; ;

ety (bs taxes affecting the citizens and commercial

entities have bern. increased to affecg'sath losses. of

... Fevenues and i income ; :

ie commerce have been restricted and curtailed ; os

: (a) the full and’ complete | utilization of the

natural wealth of the State has been: prevented ;

, 6(e) the high cost of manufacture i in Hawaii has

- precluded goods made there from equal competitive

atcess “with. those, of other States. to the national

market;

“(f) ‘measures sot by the State to protnote the.

7 progress and welfare of its n PIR, have been

rustrated ; -

‘““(g) the Hawaii economy. y has vain; held in a state

of arrested development. bia

‘Plaintiff then alleges its “Sines not’ aa ees ol the :

precise extent of said damage to itself and its citizens’’;

_ but: asked leave * to insert such sum when ascertained.*

. tFourth Atnended fe Paragraph I9.

2Fourth Amended’ Complaint, Paragraph 20. .

- 3Plaintiff’s Count. III pled a class action. Defendants’ ‘motion

; Le Cac eee eT ee ee o

ae eo

ee 84 oe:

+ money damages. ~

by all parties.‘ : 7 ™,

Cc"

shad not been pleaded and dismissed the count with leave to

- Defendants moved ti dismiss Count it sosiateinion |

(a) -‘‘there can never be a parens patriae suit for dam-

_-ages; such a suit lies only in equity, and only for pre-

ventive relief ;”’ (b) “Count Il does not in fact allege

any injury to the general economy of the State of Hawaii,

or to Hawaii in its sovereign or quasi-sovereign capacity,

_that would support. a parens patriae injunction ;’’ (c) a

parens patriae suit for damages is not maintainable ;

under Section 4 of the Clayton ‘Act which permits dam-

~ ages only to business and property, arguing that damages

to a state’s business, or property are by. definition and

nature not damages to its sovereignty” or _quasi- -sover-

eignty; (d) if dolar damages to the economy of the State

were measured by the harm done to the individual inhab-

itants, there would be created the risk of double recovery, |

"inasmuch as each of the State’s inhabitants, in theory at

ast, would be entitled to sue for any direct damage to

his own business or property; sind (e):a parens patriae

suit - fordamages ‘under the antitrust laws will not lie

because an | to the-state’s sovereignty is by its very

nature too remote_ or speculative to be. ail in

The problem has been is fly briefed and argued |

The: concept of a parens patriae count. in an antitrust

action: of the nature of the present one, emanates: from

4Jn plaintiff's Third Amended Complaint, the allegations of

Count II: flirted with the theory of a parens patriae claim, and

on defendants’ motion to dismiss, it was brief -by both plaintiff

and defendants as if it had been properly pileged. This court in |

a prior Memoranduni Decision found that a parens patriae claim

puaene. Thus,. all oe were given two shots at the’ same target.

Georgia v. Pennsylvania R. Co., 324 U-S> 439: (1945),

where, the Supreme Coyrt granted the State of Georgia’s

nies to file an amef@ed complaint which alleged and

sought, relief from an antitrust violation by twenty rail-

road companies. The amended complaint asserted four

counts of ‘injury, the Third and Fourth’ of which -sought :

treble damages for. the alleged discriminatory freight

rates charged the State and its citizens.* The Supreme

Court held that Georgia had properly asserted a cause

-of action for injunctive and damage relief as parens

patriae as well as proprietor, and permitted the com- . |

plaint involving the Court’s —— jurisdiction to be

filed. The Court stated: _ | .

‘‘Georgia, suing for her own injuries, is a ‘person’

within the meaning of §16 of the Clayton Act; she

is authorized to maintain suits to restrain violations

of the — laws or to recover damages by

reason thereof. :>. . But:Georgia is not confined to

suits: designed to protent only her proprietary inter-.

ests.- The rights which Georgia asserts, parens pa-

trie, are those arising from an alleged conspiracy

[which] . .°. injured the economy of Georgia. .

When it came to other sanctions Congress .. . au-

_ thorized civil suits not only by the United States but

by other persons as well. And we find no indication

that, when. Congress fashioned those civil remedies,

it restricted the States to.suits to protect their pro-

prietary. interests. Suits by a State, parens patriae,

‘have long been recognized. There is no apparent rea-

son why those suits should be excluded from the

‘In its supporting brief (page 8) the. State of Georgia indi-

cated that it was “not primarily interested in — ee

for past injuries to-the State and her citizens, . . [but =1-=

future welfare of the State and her people.”

“

86 a

7 4

purview of: the anii-trust acts.’ _ 324 Us. at 447.

_. (Emphasis added.)

, “Since ‘the claim which Georgia asserts as purens

patriae as well as proprietor meets the standards of —

justiciability and since Georgia-is a ‘person’ entitled

to enforce the civil sanctions of the anti-trust laws, —

‘the. reasons which have been advanced for denying ~

.Georgia the opportunity to present her cause of ~

action to this Court fail.’ *? 324 U. S. at ~~ {Emphasis —

added.) -

After allowing ‘the State of Georgia to file its €éomplaint

seeking both equitable and legal relief and stating that

all civil antitrust sanctions are available to the State in

both its proprietary and, parens patriae capacities, the

Court ruled that damages based on the allegedly exces- .

sive freight rates would not be permissible, solely because ,

they had been approyed by the- ICC and were. therefore

‘‘legal’’ rates.* This is the only case which either counsel

or the court has uncovered‘which lends precedential sup-

port to the. claim that a state may recover money dam-

ages, trebled, ‘in an antitrust action under the aegis. of a

parens patriae claim. -

There are many cases, however, hick have passed

upon the primary ‘problem of whether a state has suffi-

cient interest in a controversy to be entitled to sue as

parens patriae. In the — of the state’s stand-

ing to sue, each case poses a question. of law which can

be determined only by an analysis of the particular facts

concerned. Gerierally it has been the Supreme ‘Court

which has determined whether a . state has properly stated

6See Keogh v. Chine é N.W.R. Co., 260 US. 156 (1922) and

see ey United Parcel Service, 260 F.Supp. 391, 406 (N. D.

al. 19

87 .

a claim as parens patriae. This is because of the Conrt’s —

original jurisdiction over controversies between states or

. between .a state and citizens of, ‘another state. In passing

upon the appropriateness of a paren’ patrtae claim, the

Supreme Court actgd in its capacity as a finder of fact,

thus performing a function usually undertaken by a lower

tribunal. In Georgta v. Tennessee Copper Co., 206 US.

230, 238 (1907), the Supreme Court permitted the State

of Georgia to sue. to enjoin fumes from a copper plant —

‘: across the state border from injuring land in five (3)

Georgia counties, very. little of which was owned by the

State, stating: ,

.. [Wle are Satisfied by a pfanindatence of evi

poe that the sulphurous fumes cause and threaten

damage on so considerable a.scale to the forests and

vegetable life, if -not.to health, within the ea

State as to make out a case [parens patriae]. .

(Kimphasis er

ed on its view of the facts, the Senkense Court has

enteftained suits parens patriae to (a) restrain diversion

of water. from an interstate stream, Kansas v. Colorado,

206 T S.'46, 95-96 (1907) ; (b) enjoin changes in drainage

which increase the flow of water in an interstate stream,

North Dakota v. Minnesota, 263 U.S. 365, 374 (1923) ; (c). ?

preclude restraints on the commercial flow of natural gas, ;

Pennsylvania v. West Virginia, 262 U.S. 553 (1923) ; and

(d) restrain. the discharge of sewage into the ‘Mississippi

River. and New York Bay, Missouri v. Illinois and Chi- —

cago District, 180 U.S. 208 (1901) and New York v. New

Jersey, 256 U. S. 296 (1921). See ‘also . Pennsylvania v.

West Virginia, supra at 592, where the Supreme Court,

after finding a sufficient basis for a> suit parens patriae,

88 Oe ae ®

distinguished certain prior- opinions on the ground that

; “the facts on which they turned, as the opinions show,

were so widely different from those here that they are —

not in: point.’’ (Emphasis added. ) | -

_ Conversely, the Supreme ‘Court has rejected the pto-

' priety of suits parens patriae to (a). enforce claims of

a bank’s creditors and depositors, Oklahoma. v. Cook, 304 .

U.S. 387 - (1988) ; (b) collect. claims against another state,

which claims, prior to assignment, belonged to citizens of.

the prosecuting state, New Hampehire v.. Louisiana,” 108 a

from unlawful ‘freight rates charged its. ‘citizen-shippers,

Oklahoma v. A. T. & Santa Fe RR., 220 U.S. 277 (1911);

"and (d) enjoin alleged interference with interstate com-~

merce resulting from state quarantine regulations, Loutst-

ana v. Texas, 176 U.S. 1 (1900).” |

“An analysis of the above cases indicates that if a state

is to maintain an. action in its parens patriae capacity, ‘

initially the facts must show that the state has an inter-

est “independent of and behind the titles of its citizens,’’

Georgia, v. Tennessee Copper Co., supra; ‘‘has an interest

apart from that of the individuals affected,’ ” Pennsyl-

vania v. West Virginia, supra; ‘“must show a direct

' interest of its own and not merely seek’ recovery for thé |

| _ benefit ‘of individuals who are the real parties in inter-

est,’’ Oklahoma v. Cook, supra; * [it] must appear that

the controversy to be determined is . .. not a: controversy 7

in the vindication of grievances of particular individ-

uals,’’ Louisiana v. Texas, supra. Thus: the state’s parens-

patriae claim cannot be a disguised attempt to recover

damages on behalf: of the state’s individual citizen-—

claimants. It is not a substitute for a class action under. |

Rule 23, Fed. R. Civ. ‘P. ‘The two theories for recovery _

of damages are separate and distinct. (At this stage, we

- do not concern ourselves with the nature of ‘proof. ) So,

_ hére, the State in the guise of parens patriae cannot

.> Yeeover for the individual and several possible ‘damage

claims of ,its many gitizen-consumers of petroleum prod-

ucts. As the preceding cases unmistakably set forth, and

as the dissent in Georgia v. Eomprene? R. Co., supra,

‘ points out:

“<The inhabitants of the State who have suffered

injury or who are threatened with injury by the

‘unlawful practices alleged . - are alone entitled to

seek a legal remedy for their Anjury, - and are the

_ proper parties plaintiff in any- suit to enforce their -

rights which are alleged to have been. infringed. It

has long been settled by the decisions of this Court.

- that a State is without standing to maintain suit for

_ injuries’ sustained by its citizens and inhabitants

for which they may sue in thet own behalf. ”? 324

U.S. at 473. :

‘The cases also make vianifest a second picieeuidite

which must be -met before a state may sue in parens .

patriae, viz., the state has standing to sue in that ca-

pacity only if a substantial portion of the inhabitants of

the state are adversely affected by os nataged: acts of

the para For example: \.

[T]he interests of the single industey here

peste must be held to be private interests, not

interests affecting the whole. economy or all the

' people of the state. This type ‘OE interest -is insuffi-

cient to give Minnesota the right t6 sue as parens

“patriag 01 on behalf ‘of all, or a substantial ne of |

~ 90

‘ . her citizens.’’ Land O’Lakes Creameries v. Louistanda,

= F.Supp. 387, 389.. (Emphasis added.)? me

. [Tyhe mere fact that a State had no pecuniary

; interest in the controversy, would not defeat the orig-

. ‘by. the State as -parens patriae, trustee, guardian or

representative of all or a considerable portion of its

citizens ....’’ Kansas v. Colorado, alee at 99. (Em- |

phasis egies:

Thus; if a “ substantial Seat ‘or a- scaatlemebass

portion of ( Hawaii] citizens” are adversely affected by

the alleged acts of the defendants, Hawaii would have the

requisite standing to sue as parens patriae on behalf of

the totality of those citizens. While a state may not sue,

parens ‘patriae, for the recovery of possible individual

. damages or claims of its inhabitants, nevertheless. if de--

fendants’ acts hay, .@ deleterious impact upon the general

welfare or econéiny of the state, a state has standing to

sué for ‘both financial and —* relief in a parens .

pairiae capacity. = ar

"is dad damned by counsel and as this court would oo

judicially notice, there are almost 300,000: motor vehicles _

operating in this state with approximately 800 000 in- —

habitants. If. more facts were needed, i in this State where

the grass never ceases to grow, gasoline-powered lawn

mowers .are as thick as the proverbial fleas on a dog.

_ These’ two categories, of course, do not cover all of the

engines in Hawaii that are poemened: by pet decin: prod-—

TSee alan, Jones, Governcr ex: rel. Louisiana wv, Bowles, 322 US.

707 (1944)...

_ 8See also Kansas v. Colorado, 185 US. 125, 142. (1902) and

Missouri v. Tinois & — District, supra, at 241.

" ‘ucte: The court would judicially notice that there i is prob- |

'. ably: not a single industry nor more than an insignificant

number of ‘persons in: Hawaiio whose operations, life and

livelihood are not connected ih some way with, or affected

by, the use of. gasoline fuel and the other petroleum

products referred to in the present . — and -per-

force therefore, the cost thereof.

Hawaii meets each of the two primary reujtiieciveaitiy for

a valid parens patriae cause of action and. may maintain

~ this” suit as parens Se acting on behalf of her citi-:

zens.®

There is no nortt i in: defendants’ claim that - ate can

never be a parens patriae suit for damages; that: such a

- suit lies only in equity and only - for preventive. relief,

Georgia v. Pennsylvania R. Co., supra; unequivocally. de-

‘termines that Georgia was [and ergo “Hawaii is] ‘“‘a ‘per-

son’ entitled. to.enforce the civil, sanctions: of the anti-

trust laws.” (324 U.S. at 452) The civil sanctions of the

antitrust: laws certainly include recovery. of. damages

‘from violators thereof. As indicated earlier, the Court ’i in

denying. Georgia the right to recover damages from the

railroad, did so only because of the. prior ruling of the

Court ‘in Keogh v. Chicago N.W.R. Co., supra, note 6..:

_ Keogh was also a suit for damages under Section 7 of the

Sherman Act, 26 Stat. 210, wherein the Court determined —

that even though a’ rate-making conspiracy may have

existed between the defendant railroads, nevertheless, for

2 the purpose of a suit for damages, a rate, fixed by the

Commission, until ‘suspended or set aside, was for all

‘ef

"°Georgia v. ech Copper Co., supra; Missouri v. IUinois,

supra; Pennsylva West Virgina, supra. | ;

92" +

_, jpiapoems ‘ihe’ beg: nts. an) sstween chipper: ‘aid. eierie’,.

and denied Keogh’s antitrust action. Absent the impact

of the Keogh, decision, the only rational inference to be

drawn from Georgia v. Pennsylvania. R. Co., is. that an

: antitrust suit for treble damages was properly pled by®

Georgia in its parens patriag eapacity. Certainly the

_ broad, objectives. of the antitrust statutes are. not. to be:

meanly or narrowly curtailed because it is a state that

brings a "damage ike al in a peress: pairiae :

enuactir. a ae

"Although jifoniaate urge that Count I gees not in.

fact allege any injury to the general economy of the State — |

‘of Hawaii’’, this conclusatory argument is nullified by —

‘subparagraphs (c), (d), (e), (f) and. (g) of paragraph 2

of plaintiff’s complaint:° (See page 2, supra.) .

Defendants additionally argue that any “possible recov-

ery by the State. under a parens patriae theory must be

apart from any recovery for an injury to the business or

—__ property of the State in its proprietary. capacity. Defend-

. ants continue that the antitrust statutes allow damages to eo

‘be recovered only for injury to ‘‘business" or property.

15 U.S.C. $15. Their position is that an injury to the

economy of the State cannot be an mer to the State? 8

‘“husiness or property.”2

TeAllegation (a): is. most SE eae itentied (b) becomes

intelligible only. if the word “affect” is construed ba mean “off-

set”. See plaintiff's Count II; supra. —

-11Defendants cite Highland Supply Corp. v. : ieieia Metals

Co., 327 F.2d 725, 732 (8 Cir. 1964), as authority for the state-

ment that the damage. or injuries must be something. different

from’ that’ sustained by’ the community or general public. The

words are convenient for de ts’ argument, but the facts of ..

‘that case“heve ne application, to the parens patrise problem be- ~

fore the court. i te

» oe oo ;

. *

. .

. Ohationcegi Foundry é Pipe Works v. City of Adlonta,

203 U,S. 390 (1906), long ago said that's public body is

injured in its ‘‘property’’. when it is foreed to pay more

for a commodity than it would abgent a conspiracy. If the

economy 6fS¢-state can be injured, then that economy is

finite and can fall within a definition of the,word ‘‘prop-

. erty’’, even though’ it ddes: not fall within the normal, —

simple definition of “business and property’ ’ under Sec-

tion 4 of the Clayton. Act. As indicated abovg, ‘Georgia wv.

Pennsylvania R. Co. lays at rest: defendants’ ‘semantic

argument. It clearly there differentiated between suits

_for damages in the State’s proprietary capacity and suits

- for damages i in its quasi-sovereign capacity and held that

damages to the State’s economy, if proved, were recover-_

able as a distinct injury, severable from whatever injury

it might suffer in its proprietary capacity. 12 .

_ There can be no risk of double recovery from the plain-

tiff for any single damage. As previously stated, a parens

patriae action canriot be brought to recover-the individual

damages: of the State’s inhabitants. If ithe. State cannot ~

| prove injury ‘to the apspeih 8 economy —an injury | com-

., habitants, then of course it could recover no money dem ;

ages. On this point,-as well as in defendants’ claim. that

an ipijury to the State’s economy is ,of a nature too re-

' mote or. speeulative to -be measurable in money damages

(and eannot in Evad event be — to a . “state” 8 busi-

“But Georgia is not confined to suits designed to seeuuaiaky:

her proprietary’ interests,” and. continued, “, . . we find no indi-

~‘eation that, when Congress fashioned those civil antitrust]

" remedies, it restricted the States to suits to protéct their pro-

ripe saa en $24 U.S. at 447. — added.)

, 9

ness end puiiiinty”)) defendants move out of the area

7 of pleading into the area of proof at trial. This case is at

the pleading stage. Hawaii has pled a parens patriag

cause of-aetion that cannot be summarily dismissed. How ~

' it will prove its damage, what type’ of ; evidence will be

offered, how the quantum of alleged. damage is to be

‘measured, are problems to be mét in futuro, problems

that will be dealt with at the proper time in the light of ..

Southern Photo Materials, Storey Parchment Co., Bige-

low and Continental Ore.'* —

Defendants’ motion to dismiss Count II is DENIED.

Dated: Honotule, igen this ist day of July, 1969.

/s/

tin Pence _ -

United States District J ides

a, A

alae: Kodak v. Southern Photo Materials, 273 U.S. 359 |

(1927); Storey Parchment Co. v. Patterson Parchment Paper Co.,.

- 982 U.S. 555 (1931); Bigelow. v. RKO Pictures, Inc., 327 US.

. 251. (1946); Continental Ore, v. Unton Carbide & Carbon iene. om

. 370 US. 690 (1962). : Fs : |

95 ;

, 4

| : [July 2, 1969) “e

In the United States District Court! ~~

for the District of Hawaii

Peter sell

State of Hawaii, =’

a Plaintiff, oS

. AM Soe DoS LP etgaa ay,

‘Standard Oil Company of California, . te gees

et al, 1

- VS. ,

Defendants. Si

ORDER AND CERTIFICATION FOR |

_ INTERLOCUTORY. APPEAL .UNDER

SECTION 1292(b) OF TITLE 28

OF THE UNITED STATES CODE

The following motions of defendants came’ regularly on

for hearing before-this Court on May 29, 1969: (1) Motion...

-of Shell Oil Company and. ‘Gaile Oil Company of Cali-

| fornia for a change of venue; (2) Motion to strike para-

graph 16(f) of' the Fourth. Amended Complaint; (3) -Mo-

_ tion to dismiss Count H of the Fourth Amended Com- .

plaint; and (4) Motion to dismiss Count IIT of the Fourth

Amended Confplaint. The issues Having ‘been briefed and

sraed and having been considered by ” Court, *°

It ‘i is hereby ORDERED:

aC The . thotion of defendants ‘Shell Oil ‘Cimpadiy and

is denied. 3

2. The. motion to strike paragraph 16(f) of the Fourth —

"Amended: Complaint is granted with leave to, amend..

3. Defendants’ motion to dismiss ‘Count’ It of the.

| - Fourth Arhended Complaint is denied.

“4, Defendants’ motion to dismiss Count III of “the

“~"." Fourth Amended Complaint i is. granted, without prejudice.

This Court~ finds that. its. order denying defendants’

7 motion’ te dismiss Count IT of thé complaint herein in-,

volves a controlling question of law as to which there is

"Substantial ground for differenee of opinion and that an

immediate appeal from that order may materially advance

the ultimate termination/of this litigation. This Court,

therefore, certifies its order denying defendants’ «notion

to dismiss Count I of the complaint for interlocutory § ~

” appeal under section taaRtb). of ttle 28 of the United

".. States Code. Shh. pa Yp . -

It) is SO ORDERED this. ond in of. July, 1969.

= _/s/ Martin Pence

Tage of the United States District Court 7

‘[Certificate, of Service omitted | in n printing] |

_ ‘

In the United States District Court for the

‘District of Hawaii

Civil No. 2826

‘State of Hawaii, _ mC

Standard Oil Company of California, pend aN

' “Union ‘Gil Company of California, | . .

_ Shell . Oil Company, and Chevron As-.|

phalt, Company,

t a ange Barc :

he setienalli

CERTIFICATE OF CLERK

‘United States of ‘America, ae

‘District of. Hawaii—ss os, ~ -

7 ‘Walter A.Y.H. Chinn, Clerk of the. United States

District Court for the District of Hawaii, do hereby cer-

tify that the foregoing record on appeal in the above-

entitled cause, numbered’ from Page 1 to 79 consists of a -

- statement of the names and addresses of the attorneys of

record, a certified: copy of docket entries, trauseripts of .

|.» “proceedings, and various original enn as herein- .

_ ‘below listed and indicated: . !

98 a

- Pages

Complaint and Summons ee 22.

Third “Amended Complaint Co . , 12-21 :

Notice of Motion and Motion of Defendants

‘Standard Oil ompany of California and

Chevron Asphalt Company. for an Order

Dismissing Counts Two~and. Three of the — .

_ Third Amended. Complaint — 22 - 24

. Motion of Shell Oil Company to Strike Cer-

tain Allegations of Count One .and ‘to Dis-

miss Count Two and ‘Count Three,of the .

Third Amended Complaint — 25-34

Motion of Defendant Union Oil Oompany of

California to Dismiss or Strike Count One

and to Dismiss Counts Two and Three of

the Third ‘Amended perre and in the ="

>. Alternative te-Strike -. — 85-37

- Memorandum Decision: on Defendants’ Mo- -a-

tions to Dismiss or Alternatively to Strike

Certain Allegations of-Count One and to

eA. _ Dismiss Count Two and Count Three of the |

| Third Amended Complaint Be . 88-44 |

Fourth Amended Complaint 45 - 54

Decision on Plaintiff's Parens Patrife Coiint : 55 - 66

‘Order and Certification for Interlocutory

Appeal Under Section 1292(b) of Title 28 -

-of the United States Code | . 67-69

‘Stipulation Pursuant to Rule 11(f) of the . _

‘Docket Entries, certified copy. of | Sileei : -79 |

_ Tran8erjpts of Proceedings _

(May 23,1968 ~ toa \

July 30, 1968 .. =

December 13, 1968 , oe

' May 29, ad oe | enclosed.

_ In Witness. Whereof, I have hereunto set my hand and

affixéd the seal of said court this 4th day of —

1969.

> es 1s} Walter A.Y.H. Chinn

: / . * Walter A.Y.H. Chinn, Clerk

e318 United States District Court -

) District of Hawaii

By I..P..Akana

. ~~

Chief Deputy -

> 100

“In the United States Court of Appeals -

for the Ninth Cireuit 2

No. 24,603 _

hee

State of Hawaii, Z - #).

~ : Plaintiff-A ppellee,

Standard Oil Company of California, -

_ Union Oil Company of California,

_« Shell Oil Company, and |

Chevron Asphalt Company, ,

— eee

[September 25, 1970}

On Appeal from the United States District Court _

for the District of Hawaii

_ Before: Merrill, Wright and - Trask, Circuit J udges

Merrill, Circuit Judge

This appeal presents the ae: whether acstate can,

under §4 of the Clayton Act, 15 U.S.C. §15,) maintain a

. suit for treble damages as parens patriac for injury done

to the general. secs of the state. We hold it cannot. -

1#§15. Suits by persons injured; amount of recovery

Any person. who shall be injured in his business or property by

réason of anything forbidden in the azititrust laws may sue there-

for in any district court of the United States in the district in,

- which the defendant resides or is found or has an agent, without -

respect to amount in controversy, and shall recover threefold —

* the by him sustained, and - cost of suit, — a

reasonable attorney's fee.”

fe: .

”

? ‘101 | * _

_ The amended complaint filed by the State of Hawaii -

alleges that appellants conspired to fix and maintain un-

_ Teasonably high prices for motor gasoline and asphalt in

_ Hawaii. Count I alleges losses suffered by the state in

' its proprietary: capacity. Count II, with which we are

coneerned, alleges :. } fe ; a

“The State of Hawaii * * * brings this-action by .

virtue of its duty to protect the general welfare of —

the State and its citizens, acting herein as parens

-patriae, trustee, guardian and representative of its

citizens, to recover damages for, and secure injunc-

tive relief against, the violations of the antitrust |

_laws hereinbefore alleged.”

The complaint then continues: nite <i

| “The: unlawful contracts * * * have injured and.

adversely affected the economy and prosperity. of. the.

State of Hawaii in, among others, the following ways:

SE ES TET OEE hae!

. Then are listed the seven specifications of injury set forth

in the margin.? ¢ | : Riebpew yes

, : fe SE Eee

- (a) revenues of. its citizens have been wrongfully extracted

’ from [the economy of] the State of Hawaii; } :

(b) taxes affecting the citizens” and commercial’ entities have

been increased to [offset] such losses of revenues and income;

the State has been- prevented; pores

(e) the high cost of: manufacture in Hawaii. has: precluded *

goods made there from equal competitive access with those of

(f) measures taken by the State to” promote the general

progress and welfare of its people have been frustrated; * "

(g) The Hawaii economy has been held in a state of arrested

Mie Soa ae

(The brack is u in response to Hawaii’s

assertion that. it serves to correct. typographical error in the com-

plaint as filed.) — By

102

The prayer is for injunction ani for treble joe

under §4 of the Clayton Act. Respecting. = atl under go

* Count II, the complaint: alleges: 7

‘‘ Plaintiff has not yet ascertained the precise sateith |

of said damage to itself and its citizens; however,

- when such amount has been ascertained, — will

ask leave of court -to insert said sum herein.”

| " xppaihaaita moved. ‘to dismiss Count II on the Pioaad |

that it failed to state a claim. The motion was denied.® |

he opinion of the court in support of its order appears

- at 301. F.Supp... 982 (D. C. Hawaii 1969), This appeal is

taken from the court’s order — to 28. U.S.C.

$1292(b). : ‘

Appellants attack Count I en many axiandn. They

contend that parens patriae suits. will not lie to recover —

" money damages. They contend that injury to the general

economy of a state is not. susceptible of computation or.

of proof, and that allegations of such injury should not

be recognized’ as presenting a justiciable case or- con-

troversy. The basis of our ‘disposition of the case makes .

it unnecessary to reach these issues. We hold only: that .

damages for injury done to’ the . general economy of a

state are, not recoverable by: the state ‘under. §4 of ae

Clayton Act. .

. Hawaii relies (as did the District Court). on Georgia. v. ‘

Pennsylvania Railroad Co., 324 U.S. 439 (1945). Georgia,

invoking the original jurisdiction of. the ‘Supreme Court

.*The complaint, in a i esunt; atvenpted 40-sate h dem

action claim under Rule 23, Fed.R.Civ.P., on behalf-of the state

and all citizens who have ‘purchased products from appellants. -

pel unc ols tec larmatiac tat x gendte

talen. Sonn SSE, Sesion. he

108 Nes ial

- (Art. TEL, §2 of the Constitution), there sought leave to

file a complaint against twenty railroad companies charg-

ing a conspiracy to ‘fix arbitrary and noncompetitive

freight rates to and from Georgia so as’ to prefer the.

ports of other states over those of Georgia, The nature

of the injury allegedly suffered by Georgia is similar to -

that here alleged by Hawaii (see footnote Sp

Leave was granted. The Court stated: .

“Georgia as a representative of the public is com- |

plaining of a wrong which, if proven, limits the op- _ :

__ portunities of her people, shackles her industries, .* <+

retards her development, and relegates. her to an se |

inferior economic position among her sister States. |

These are matters of grave public concern in which

Georgia has an interest apart from that of particular

individuals who may be aioe. 324 U.S. at 451. |

_ And: . of “iOS Siac —

‘‘But Georgia is not: confined to suits designéia =

protect only her proprietary interests, The rights >

which Georgia asserts, parens patriae, are°those aris-_

~ ing from an alleged conspiracy of private persons.

whose price-fixing scheme, it is said, has: injured the

economy of Georgia. * * * Suits by a State, parens

patriae, have long been recognized. There is no ap-

parent reason why those. suits should be excluded

, from - sipyiconnstt of the anti-trust acte, 7“ US. at.

447,

Te a

As the Court made clear, however, it “was se acieed

with the‘ relief offered by §16 of the Clayton Act.-

‘‘Sec. 16 of the Clayton Act provides: for relief. by

injunction ‘when and under the same conditions and

principles as injunctive relief against the threatened

conduct that will cause loss. or damage is granted by .

104

courts of equity.’ Those requirements are sufficiently:

satisfied to justify a filing of this bill. It must be

remembered that this is a suit to dissolve an illegal

combination or to confine it to the legitimate area

of collaboration. ”? 324 U.S. at 468. : d

form of relief accorded in anti-trust suits. No more

bi Pang molt waa —* a fal

Section 16, 15 U.S.C: §96° ia far broeder than44. Any

7 person’ may secure injunctivé relief against threatened

loss or damage by violation of the antitrust laws. Section :

4 provides for recovery of treble damages only by a per-

son injured in his business or property 7 such a viola-—

tion.

Hinwaii?a adie does not constitute an effort to prevent —

unjust enrichment by the -wrongdoers through. recovery

by the state, for the. affected consumers or. for itself,

of the total of direct injuries suffered by persons who

are unable to seek recovery for themselves.* Hawaii’s

| SuThus the Court in Georgia did not specifically rule on the

question whether damages are recoverable in parens patriae suits.

As we have noted, we do not reach that question here. ar

. §Section 16 provides in part:

.“Any person, firm, corporation, or association shall be en-

titled to sue is ae and have injunctive relief, in any court of

the United States: having jurisdiction over the parties,

against thréatened loss or damage by a violation of the anti-

trust laws * * * when and under the same conditions and

principles ag injunctive relief against threatened conduct —

that will cause loss or damage is granted by courts of

- equity, under the rules governing sucli proceedings * * *.”

_ / ®Ag noted (footnote 3; supra), Hawaii's class action was die:

minged and is not before us.’

sat of illegal combinations or a restriction ° ,

of their conduct to lawful channels i is a conventional

106

- elainkSs over wa sibs all such recovery by persons, or -

on behalf -of classes, and is assertéd to have independent

existence quite apart from such dirvet injuries. In. light.

of. Hawaii’s inability yet to articulate a more precise

- theory or ineasure of such damages, we are skeptical of

the existence of an independent: harm to the general |

economy. The general. economy is an abstraction. It. has

‘no value’ in itself, Save as it may (in a representational

capacity , on behalf of business and propert generally)

_serve to cgnfer value. on the specific items o ess or

property it affects. It exists: only asai reflection of the

' business or property values it represents.

Nevertheless, aasimeing arguendo that the general "

economy’ can . suffer ‘injury: from antitrust. violations’

independent of the injuries suffered by private persons .

"or by the state in its proprietary role, we hold upon two *

closely related grounds that Hawaii’s claim for money

=. * An injury to- the general economy of the state is

. not an injury to the business or property of the state or

its people. Aggtate can, in its proprietary capacity, en-

+ gage in business. For injury suffered in these respects

a state can recover under $4: Georgia v| Evans, 316 U.S.

159 . (1942). Such was the basis for. Hawaii’ s Count I.

But the terms ‘‘business or property’? are to be ¢con-

‘strued in their ordinary ‘sense: they do not encompass

all pecuniary injury, let alone all manner of damage felt

by a community. E.g., Martin v. Phillips. Petroleum’ Co.,-

365 F.2d. 629 (5th Cir. ), cert.-denied, 385 US. 991 (1966) ;

Duff v. Kansas City Star Co., 299 F.2d 320 (8th Cir.

tant Roseland v. Pfister Mfg. Co., (125 Fed 417 (ath

cad

106

) eg | ; a “Cir. 1942). Unless the conan of business or property

are expanded well beyond traditional usage, the ‘general

eeonomy of a region cannot be regarded as property in / :

possession of the residents individually or publicly,

2. Accepting that’ the general nomy can suffer in-

jury fromntitrust violations, such"Mjury is indirect and

consequential to a degree and in’a’sense far beyond that

usually discussed in this connecfion. It has long been. .

os established that 6ne whose injury isan incidental or.

- remote consequence ‘of defendant’s violation may not .

recover. under the Clayton Act. Karseal Corp. wv. Richfield

‘ Oil .Corp., 221 ¥.2d:358, 363 (9th Cir. 1955). Accordingly,

- it has been held that shareholders, Bookout v. Schine

Chain Theatres, Inc., 253 F.2d 292 (2d Cir. 1958) ; lessors,

_ Melrose Realty Co. v- Loew’s, Inc., 234 ¥.2d 518 (3d Cir. “)s

cert. denied, 352 U.S. 890 (1956).; creditors, Loeb v. East- 2

man Kodak Co., 183 Fed. 704 - (3d Cir. 1910); patent

owners suing for loss of ‘royalties, Productive Inventions, ’

* Ine. v. Trico Prods. Corp., 224 F.2d 678 (2d ‘Cir. 1955) ;.

- and others of like remoteness lack | standing to obtain hf

damages under the antitrust laws.

The attenuated injuries alleged by Hawaii fall tas ale

_ side the area of directness contemplated by the Clayton

~ Act. Compensation of the public (let alone treble dam-

ages) for injury” of such-an extraerdinary charaéter :

presents policy questions which, in our view, should be *

subjectéd to close Congressional inquiry and study. We

_ do not believe that $4 as it now stands.can be construed:

to make such recovery available... % 7 ;

a Reversed: and remanded with’ tebtiatiias that Count

I “ Hawaii’s ee complaint. Be. dismissed. ~

107

' United States Court of Appeals

for the Ninth Cirenit

| No. 24,603

‘State of Hawaii, , ts : i

Caton, : Fiaintift-Appelive,

"Standard Oil Company of California,. et al.;

hi Sa oe . _Defendants-Appellants as |

~ Appeal from the United. ‘States: District Court —

- for the District of Hawaii

JUDGMENT ac ete #

THIS CAUSE came on to be heard on the Transcript

of the Record from the United States District Coug x oe

the District of Hawaii amd was duly submitted.

ON CONSIDERATION WHEREOF, It is now Bee.

ordered. and adjudged by this Court, that the judgment

of the said District Court in this Cause be, and héreby is

reversed and remanded with instructions that Count

‘Hawaii’ 8 amended complaint be dismissed. eh

Filed 4nd entered September 25, 1970.

“

108

. Supreme Court ofthe United States =F

~ #,° | Office of the Clerk gs |

TT} lle: vereecabia C. 20543 f+

E. Robert Sener ate

Clerk of ‘the Court ean’ :

Mea ge ge 2 ~~ ~Mareh 2, 7463 |

- Peter J: Dennici, Esq. nr pret, Pe ek

lt Sutter Street, ye

' Suite 1421 | a

San Francisco; California ‘ 94104. : ss : "

| - Re: Hawaii v. Standard Oit toleaas

of California, No. 1060, O.T. 1970

“The petition for a writ of certiorari is granted. Mr. .

Justice Harlan took no part in the consideration or

| decision, of this petition.” =~

a oy ;

¢ .

eR See nent

Set ere @ rey,

ss —

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.