# Appendix — Hawaii v. Standard Oil Co. of Cal. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386413_0365%3A01 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 1972 - **Citation:** 405 U.S. 251 ## Text Pa APPENDIX. Bn the Supreme Court. = \: pw ae eg, | Auited States | OcroBer TERM, 1970 , ee : Pa . | 3 —_—_ \ . : . | 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)....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 Pa 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 oo 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 on 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 7 - 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 —_ 18 - 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 ED 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. a 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) I - : 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. , yy 22 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 7 “\ "| (@) segreed to rig bids on the vale of ‘gasoline and | Hart ervbalt to. tp State of Hawaii, itt poltion! cub 5 24 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 = . . ‘ . oe 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 — , - 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. : . | 29 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 . a 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. Vv ‘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 31 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 e 32 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- i ~ls) ere: 33 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 - 2 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; 35 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 ‘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 & 42 > 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) 45 + (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 te 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. ¥, i) 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- : 48 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 : 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 “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. 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 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 “- , 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 + 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, ; 66 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} EY 8 [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 68 _ 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] : & ; : : C2 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 0 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= : . & 9 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 et 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 AY 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 thereof. But Georgia is not confined to suits designed © 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 @ ——— 7 ) = Ls) ce 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 19 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. . Ps ; 7 . 7 v\ 81 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. 4 fe DECISION ON ‘PLAINTIFF'S _ PARENS PATRIAE COUNT © .:. he State \ Hawaii ‘brought this antitrust action against three oil companies and a subsidiary of, one, 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.” “ ee 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 U.S. 76 (1883) ; (c) recover for injury allegedly resulting © 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: a “. 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 . _ Federal: Rules of Appellate Procedure © - 70-72 ‘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. 90 _ 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 . ~~ . é 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 7 af [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.” ae eo The complaint then continues: nite 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 g | 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 damages does- not fall within $4. © =. * 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 a 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.” =~ J a oy ; ¢ . eR See nent Set ere @ rey, ss — --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386413_0365%3A01. Public record. Not legal advice.