Memorandum — Washington v. General Motors Corp.

Supreme Court brief1971

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SUBJECT INDEX

Page

I 1

i ccensechantiateas cies tnnicdotuaces 2

4 Part I. Choice of Substantive Law .0.0..........cesccceses. 2

1. Federal Law Governs the Substantive Issues in

eS : 2

2. Plaintiffs Strike Count III. .......... uae 4

3. Count II Will Probably Not Be Reached. If It

Is, It Is Controlled by State Common Law, and

Is a Claim Pendent to Count I. ............................ 4

4. The Federal Law Questions Require Deter-

mination by This Court. .............. :

Part II. 7 to Defendants’ Supplemental

Memorandum. ...................... 8

TS: ES eae Ne Sa | Ie de RR OT

cise of Original Jurisdiction in This Case.

(Reply to Def. Supp. Mem. pp. 5-8) ................ 8

6. There Is No Right to a Jury Trial in This Case.

(Reply to Def. Supp. Mem. p. 14) : 10

7. Collateral Estoppel Will Not Impair the Right

to Jury Trial. (Reply to Def. Supp. Mem. p. 14) 12

8. This Court Can Handle This Case Efficiently

and Expeditiously With a Special Master.

(Reply to Def. Supp. Mem. pp. 13-14) ............ 13

9. The Equitable Relief Sought by Plaintiff States

Is the Most Appropriate Remedy for the Con-

tinuing Loss or Damage Caused & Defendants’

Alleged Sherman Act Violations. The Clean Air

Amendments of 1970 in No Way Detract From

the Traditional Powers of an Equity Court

Sitting in an Antitrust Case. (Reply to Def.

ee) ener ae 15

a ee ree ls

Page

10. In Any Event, Defendants’ Argument Regard-

ing Relief Is Totally Premature. (Reply to Def

I I, SN TD sc cicsicinscsicesenscniinsonemsccniseoons

Part III. Recent Developments ..........................scesessee-

11. Recent Developments Confirm the Need for

Original Jurisdiction to be Exercised. ................ 20

ESE SR ROS STI SR

TABLES OF AUTHORITY

Table of Cases

Anderson v. Mt. Ciemens Pottery Co.,

328 U.S. 680, 689 (1946) .. -

Associated Press v. United States, 326 U.S. 1 (1945) ...

Beacon Theatres, Inc. v. Westover,

359 U.S. 500 (1959) sisi esto dbictiaiateaadoncs 10, 11, 12

Blonder-Tongue v. University Foundation,

402 U.S. °313. 320-27 (1974) ane sbiecunaliiuiasods

Bowles v. Carnegie-Illinois Steel Corp.,

149 F.2d 545 (7th Cir., 1945) .....

Cannon v. Texas Gulf Sulphur Co.,

323 F. Supp. 990 (S.D.N.Y., 1971) ..........

' Dairy Queen Inc. v. Wood, 369 U.S. 469-( 1962) ......

Dyker Bldg. Co. v. United States,

ek Oe oD |: ) ENERO ee

Georgia v. Pennsylvania R. Co.,

324 U.S. 439 (1949) .....

Grove Laboratories v. Bri wer & Co.,

. 103 F.2d 175 (1st Cir., 1939) ..

pie Sa) ET RR er ag fry Ss Ma eA qe: 4 oe al

iii

Page

Kennard v. Cory Brothers & Co., |

[1922] L.R. 1 Ch. 265 (C.A.) ooncecccseecoseccees 16

LaBuy v. Howes Leather Co., 352 U.S. 249 (1937) ...... 14

Lupton v. Chase National Bank of City of New York,

89 F.Supp. 393 (D.C. Neb., 1950) ......... 14

Lynne Carol Fashions, Inc. v. Cranston Print Works

Co., Inc., No. 19,599 (3d cir., Jan. 17, 1972) ........... 13

New Jersey v. New York, 345 U.S. 369 (1953) wo... 24

Ohio v. Wyandotte Chemical Corp.,

401 U.S. 493 (1971) oc eee 8, 9, 18

Oregon v. Mitchell, 400 U.S. 112 (1970) .oeecocccceeecceeeee 6

Rachal v. Hill, 435 F.2d 59 (5th Cir., 1970),

cert. denied 403 U.S. 904 (1971) ooeeccccccccccccsseceses 12, 13

United Mine Workers v. Gibbs,

383 U.S. 715, 721-729 (1966) ........ 5

United States v. Addyston Pipe and Steel Co.,

85 Fed. 271, 285 (CCA 6th, 1898) affd.

VTS U.S. 211 (1899) nec cccccccccceseeceecoscesecece.. 5

United States v. Automobile Manufacturers Ass'n,

307 F. Supp. 617 (C.D. Cal., 1969), aff'd. sub nom.

City of New York v. United States, 397 U.S.

se anti Nespas CO i TE 22

United States v. DuPont & Co., 366 U.S. 316 (1961) .... 16

United States v. Grinnell Corp., 384 U.S. 563 (1966) .... 16

United States v. Singer M anufacturing Co.,

S74 US. 174 (UGGS) nna cceccecesenceesereereeecee... 6

United States v. U.S. Gypsum Co.

333 U.S. 364, 396 (1948) ileal itedmaieatadaailes 6

Vane v. Lord Barnard,

Court of Chancery, 1716, 2 Vernon 738 ......... 16

Clayton Act, Section 16 oo..........cccccccceseeseccecceccececcenceeees 3, 6, 7

2B U.S.C., §1292(b) eececececocsccccsesseesesseonessssssssesssesseseeee 25

§YAO4 ee ecccocccccccsessessssssensnssseeeceseesessesnsmnsnesse 26

ND 2

The Clean Air Act Amendments of 1970 ...................- 17, 19

Textbooks

5A Moore, FEDERAL PRACTICE, 2904 (2nd ed., 1971) .... 14

Chafee & Re, Cases and Materials on Equity,

893 (Sth Ed., 1OQMY nanan 16

Other Authority

Attorney General's Comm. to Study Antitrust Laws,

230-231 (1955) .......... - 2

Federal Rules of Civil Procedure, Rule 52(a) ................ 14

Rule 53(e) (2) .......... 13

Chief Justice Burger, State of the Federal Judiciary,

90 §.Ct. 2381, 2383 (1970) ............... .. 10

4 Restatement of Torts, Note on Terminology,

at 680-81 (1939) eccccccccccsscsssssssssssstsssssssssersrcseseeeeeeeeee ‘16

IN THE

Supreme Court of the United States

October Term, 1971

STATE OF WASHINGTON, et al,

Plaintiffs,

GENERAL Morors Corporation, et al.,

Defendants.

PLAINTIFFS’ MEMORANDUM ON CHOICE OF

SUBSTANTIVE LAW AND BRIEF IN REPLY TO

- DEFENDANTS’ SUPPLEMENTAL MEMORANDUM

Introductory Statement

The Supreme Court has directed all parties in this

action to file simultaneous memoranda on the issue: Would

federal or state law govern the substantive issues sought

to be presented for decision in original actions such as

this one?

The question of whether federal or state law is ap-

plicable was treated briefly in plaintiffs’ supplemental

memorandum of law dated February 12, 1971 (in respect

to Count III, the nuisance count) and in the brief of

sixteen states and the City of New York as amici curiae

(in respect to Count I, the alleged Sherman Act violation ).

For reasons explained in Part I, infra at p. 4, the choice of

law issue respecting Count III is now moot.

On December 24, 1971 defendants filed a supplemental

memorandum in opposition (Def. Supp. Mem.) to plain-

tiffs’ motion for leave to file complaint. Part II, beginning

at p. 8, infra, replies to that supplemental memorandum

Pertinent recent developments in the multidistrict motor

vehicle pollution cases, MDL No. 31, transferred to Judge

Manuel Real, Central District of California at Los Angeles,

pursuant to 28 U.S.C. § 1407 are called to this Court’s at-

tention in Part III, beginning at 20, infra.

ARGUMENT

PART I.

CHOICE OF SUBSTANTIVE LAW

1. Federal Law Governs the Substantive Issues in This

Action.

-The gravamen of plaintiffs’ complaint is Count I, charg-

ing a federal antitrust violation. Plaintiff states allege a

classic antitrust conspiracy to suppress technology and

marketing of effective motor vehicle pollution control

devices. See report of Attorney General’s Comm. to Study

Antitrust Laws, 230-231 (1955) and cases cited.

Specifically, these plaintiff states allege in their proposed

complaint (Comp.) that beginning at least as early as

1953 and continuing until at least September 1969, the

defendants combined and conspired among themselves

and with other co-conspirators to suppress and retard

research, development, manufacture and installation of

effective motor vehicle air pollution control equipment

(Comp. { 16, p. 5).

The complaint alleges certain specific actions taken in

concert and in furtherance of the alleged conspiracy

including:

1. The restriction and suppression of pollution control

technology (Comp. { 17(a), 18(a), (b)).

2. Delayed installation of “positive crank case ventila-

tion, both inside and outside the state of California”

(Comp. { 17(c)(1) and (2)).

3. The restriction and suppression of publicity, which in

fact includes a persistent pattern of alleged misrepresenta-

tions to governmental bodies and administrative agencies

relating to research and development efforts concerning

motor vehicle air pollution (Comp. { 17(d) ).

The conspiracy alleged and the specific acts in further-

ance of the conspiracy describe violations of the Sherman

Act.

This case arose directly out of the 1969 Justice Depart-

ment civil complaint charging defendants with the same

conspiracy alleged in plaintiffs’ proposed complaint.

The proposed complaint also includes a count alleging

common law conspiracy (Count II) and a count alleging

nuisance (Count III), in addition to the antitrust viola-

tions. However, these counts were included only to sup-

plement and support Count I.

Defendants had argued in the multidistrict proceedings

that, even if plaintiffs in these actions could establish

antitrust violations as alleged, the equitable relief sought

was beyond that permitted by Section 16 of the Clayton

Act.

Count II was added to authorize use of this Court’s

general equitable powers so that relief could be afforded

in one case in the unlikely event defendants’ narrow con-

struction of Section 16 of the Clayton Act prevailed. The

choice of law applicable to Count II, should Count II

become relevant, is discussed below.

2. Plaintiffs Strike Count III.

Count III was included to give additional support to the

Count I antitrust claim. While the wrong for which these

states seek relief was a conspiracy in restraint of trade,

plaintiff states recognized the possibility that the facts

might also establish another actionable wrong, namely, the

tort of nuisance. Before they had seen the evidence avail-

able to them through the multidistrict proceedings, plain-

tiffs were concerned that they might possibly fail to prove

a conspiracy in restraint of trade, but, at the same time

might establish another actionable wrong entitling them

to similar relief. For that reason, Count III was included

as a secondary claim. ¢

Nowy having had the opportunity to review documen-

tary evidence available to them under a protective order

in MDL Docket No. 31, plaintiffs are confident that the

conspiracy alleged can be proved. Rather than encumber

this case with an additional and broader nuisance claim,

they prefer to simplify the issues in deference to the urgent

need for speedy resolution and relief based only upon the

antitrust claim. Accordingly, plaintiff states hereby strike

Count III from their proposed complaint.

3. Count II Will Probably Not Be Reached. If It Is,

It Is Controlled by State Common Law, and Is a

Claim Pendent to Count I.

The principal equitable relief plaintiffs seek is a manda-

tory injunction requiring defendants, at their expense, to

retrofit all pre-1968 cars with effective pollution control

devices (Comp., Prayer J 4). Defendants’ argument, based

on a narrow and untenable reading of § 16 of the Clayton

Act, is both totally premature at this stage of the litigation,

and wrong. Accordingly, choice of law under Count II has

only remote and contingent significance.

Moreover, it is an easy question. Count II is a classic

pendent jurisdiction claim seeking relief under state: law

for the same acts alleged in Count I to be wrongful under

the Sherman Act. See United Mine Workers v. Gibbs, 383

U.S. 715, 721-729 (1966). See also defendants’ Brief in

Opposition at page 12.

The state law applicable is “the general doctrine of the

common law that contracts restraining competition . . .

are void.” United States v. Addyston Pipe and Steel Co.,

85 Fed. 271, 285 (CCA 6th, 1898) aff'd. 175 U.S. 211

(1899). In his opinion, Judge Taft carefully reviewed the

common law in at least 16 different states, as well as Eng-

land and Canada, regarding contracts in restraint of trade,

and concluded

.. . that the association of the defendants, however

reasonable the prices they fixed, however great the

competition they had to encounter, and however great

the necessity for curbing themselves by joint agree-

ment from committing financial suicide by ill-advised

competition, was void at common law, because in res-

traint of trade and tending to a monopoly. United

States v. Addyston Pipe and Steel Co., supra, at 291.

Thus, inclusion of Count II in no way complicates this

case. It raises no new or different facts; and it presents no

difficult question on choice of law.

4. The Federal Law Questions Require Determination

By This Court. ,

Contrary to defendants’ assertion, this is not principally

a fact case. To the extent there are factual questions, they

will turn primarily upon documentary evidence. Judge

Real, who has supervised the multidistrict proceedings

sinve their commencersent in April 1970, and who at-

tended a portion of the one deposition taken in the multi-

district actions to date, recently observed:

“I saw the deposition of Mr. Caris and read it all or

with that part of it, it does boil down to a document

case because that is all that came out of Mr. Caris’

deposition was basically reading documents.” Tran-

script of Proceedings, Los Angeles, California, Janu-

ary 11, 1972, p. 8

Appellate review of factual findings has always been

broader when those findings were not based upon oral

testimony.’ United States v. U.S. Gypsum Co., 333 U.S.

364, 396 (1948) (Oral testimony conflicting with contem-

poraneous documents); Grove Laboratories v. Brewer &

Co., 103 F.2d 175 (1st Cir. 1939) (depositions); Bowles

v. Carnegie-Illinois Steel Corp., 149 F.2d 545 (7th Cir.

1945) (affidavits ). The essentially documentary nature of

the evidence will greatly facilitate trial by this Court of

such limited fact issues as this case presents.

This case will not, however, turn primarily upon dis-

puted questions of fact but upon the resolution of import-

ant questions of federal law. Cf: Oregon v. Mitchell, 400

U.S. 112 (1970) (18 year old vote case).

Both here and in the multidistrict cases, including the

interlocutory appeals to the Ninth Circuit, defendants have

raised certain fundamental questions about the Sherman

and Clayton Acts. The first question, presently sub judice in

the Ninth Circuit on interlocutory appeal from an order

of Judge Manuel Real denying defendants’ motion to dis-

"1. This same point disposes of defendants’ reliance upon United States

v. Singer Manufacturing Co., 374 U.S. 174 (1963) regarding the value

of irtermediate appellate review. (Defs. Supp. Memo, p. 13).

ORI OR heat aati ater COSY ee RE OEE OAL RM SIE SUBIR NEN Rid OOF Hegre OS TOGO RRS SD Vrs Sk carrie EPAPER Su

miss, is whether or not plaintiff states have standing to

sue on behalf of their citizens for relief under, the federal

antitrust laws in the absence of a “commercial relation-

ship” between the victim and the perpetrator of the alleged

antitrust conspiracv.

The second question, which defendants have suggested

here, is whether or not plaintiffs can legally obtain the

injunctive relief for which they have prayed. Specifically,

defendants challenge the power of a federal court under

Section 16 of the Clayton Act to grant the retrofit Telief

sought by these plaintiffs and amici. As we shall ‘dow

below, both of these questions are prematurely raised by

defendants at this juncture.

Irrespective of that, however, these vital questions. of

federal law must ultimately reach and be resolved by this

Court, whether it accepts original jurisdiction or permits

the questions to reach this Court in the traditional appel-

late fashion.

PART II.

REPLY TO DEFENDANTS’ SUPPLEMENTAL

MEMORANDUM

5. Georgia v. Pennsylvania R. Co., and Ohio v. Wyan-

dotte Chemicals Corp., Support an Exercise of

Original Jurisdiction in This Case. (Reply to Def.

Supp. Mem. pp. 5-8)

In Georgia v. Pennsylvania R. Co., 324 U.S. 4:19 (1949)

the standards for exercising original jurisdiction in con-

troversies between a state and citizens of another state

were first announced as follows:

The Court in its discretion has withheld the exercise

of its jurisdiction where there has been no want of

another suitable forum to which the cause may be

remitted in the interests of convenience, efficiency

and justice. Georgia v. Chattanooga, supra; Massa-

chusettts v. Missouri, supra. 324 U.S. 464-465.

The availability of a more suitable alternative forum,

namely the courts of Ohio, was clear in Ohio v. Wyandotte

Chemical Corp., 401 U.S. 493 (1971). As this Court stated

and indeed, as counsel for the State of Ohio admitted in

oral argument:

The courts of Ohio, under modern principles of the

scope of subject matter and in personam jurisdiction,

have a claim as compelling as any that can be made

out for this Court to exercise jurisdiction to adjudicate

the instant controversy, and they would decide it

under the same common law of nuisance upon which

our determination would have to rest. 401 U.S. at 500

However, there is no alternative forum more suited to trial

of the present case.

Defendants urge that granting plaintiffs’ motion would

impose insuperable burdens on this Court and detract

from its paramount role as the supreme federal appellate

a ot

SPOR Pe Rett e Prats ye pet teers RE Tee A TENET Re EE & HO Es MRIS S

court. Def. Supp. Mem. p. 39. Indeed, they charge plaintiff

states with disregard for “this Court’s other manifold

responsibilties.”

But, in fact, while defendants’ approach might spare

this Court some additional effort in the short run, at the

same time, by delaying a final resolution of this matter,

defendants’ approach would actually impose far greater

burdens cn this Court and indeed on the entire federal

judicial system. If original jurisdiction is not exercised, and

if plaintiff states must pursue their remedies in the district

courts, there could be as many as 23 separate district court

trials with appellate review in all 10 circuits.?

As implicitly recognized by the Chief Justice in his two

State of the Federal Judiciary addresses, the current role

of this Court in.the federal system is not limited to func-

tioning as the supreme federal appellate court, but includes

ultimate respongibility for maintaining and assuring overall

efficiency and viability of the entire federal judicial system.

Accordingly, weighing alternative available forums against

this forum by standards of convenience, efficiency and

justice, this Court must consider the effect of its choice

upon the entire federal judicial system, not simply upon

the workload of this Court. Precisely this point was made

by Mr. Justice Harlan in Ohio v. Wyandotte Chemicals

Corp., 401 U.S. at 499, when he said: “Protecting this

Court per se is at best a secondary consideration.”

The present case is indeed unique in the history of

federal court litigation. It alleges a nationwide conspiracy

in restraint of trade, most susceptible of remedy by nation-

2. As discussed infra at 24, plaintiffs are attempting to expedite

the multidistrict litigation, but there is no assurance those efforts will

succeed.

—— . — : ee

ee Se aE arma whee aod om Prey ae

wide, uniform equitable relief. While monetary damages

may lie, and may be the only meaningful relief if trial

is delayed, such damages are not an adequate or the most

appropriate remedy. Plaintiffs seek clean air, not money.

The scope of this problem results from the way automo-

biles have altered our society. *

In this 20th Century, wars, social upheaval, and

the inventiveness of Man have altered individual lives

and society. The automobile, for example, did more

than change the courting habits of American youth—

it paved the continent with concrete and black top;

it created the most mobile society on earth with all

its dislocations; it led people from rural areas to

crowd the unprepared cities. Chief Justice Burger,

aon of the Federal Judiciary, 90 S.Ct. 2381, 2383

1970).

If future cases combine a national wrong with a need for

national injunctive relief as in this case, Congress may

fashion a national forum alternative to the original juris-

diction of this Court. At this juncture, however, the original

jurisdiction of this Court is the only “adequate machinery”

available for meaningful determination of this dispute

between thirty-four states and the citizens of another state.

See Georgia v. Pennsylvania R. Co., 324 U.S. at 450.

6. There Is No Right to a Jury Trial in This Case.

(Reply to Def. Supp. Mem. p. 14)

Defendants express concern in their supplemental mem-

orandum thai a non-jury trial by this Court would have

“powerful and perhaps controlling effect” upon subsequent

jury trials of damage claims in related district court actions

(Defs.’ Supp. Mem., p. 15). Defendants attempt to rely

on Beacon Theatres, Inc. v. Westover, 359 U.S. 500 (1959)

ens Se PERONEAL CO hae allt Oe et Se eg —

and Blonder-Tongue v. University Foundation, 402 U.S.

313, 320-27 (1971).

Exercise of original jurisdiction by this Court would

result in a single trial of the equitable relief cases brought

by 37 of the 40 governmental plaintiffs. Left to be tried

in appropriate district courts would only be a maximum

of six cases.* These are, of course, different cases from

those brought by plaintiffs and amici here.

Nobody in this case has any right to a jury trial. Simi-

larly, where a plaintiff seeks damages, a jury trial right

exists for either party. Yet, no defendant has a right toaiury -

in one plaintiff's equitable case simply because another

plaintiff has a separate case seeking damages upon similar

allegations. Nor can it be seriously argued that a defendant

has a right to delay trial of the equitable case until after

the separate damages case has been tried, especially where

such delay may render relief in the equitable case mean-

ingless.

Because separate cases by separate plaintiffs are in-

volved here, the principles underlying such decisions as

Beacon Theatres, Inc. v. Westover, 359 U.S. 500 (1959),

relied on by defendants are wholly inapplicable.‘

3. Plaintiffs in these cases are California; the City of Philadelphia,

et al.; a cropfarmer class action entitled Morgan; a Chicago consumers

class action entitled Keane; AMF Inc., a third party manufacturer; and

Sturtz, a third party inventor. The Morgan class was approved by Judge

Real and the Keune class was dismissed. The appropriateness of both

these classes is sub judice in the 9th Circuit.

4. Thus, there is no occasion to consider whether in a single case

separate trials first on equitable and then on legal counts would be

warranted under the exceptional circumstances of this litigation. Beacon

Theatres notes that there may be “imperative circumstances” where a

prior determination of an equitable claim may be permissible in the trial

court’s discretion even though that would be binding in a subsequent

jury trial on another ‘claim in the same case. 359 U.S. at 510-511; see

also Dairy Queen Inc. v. Wood, 369 US. 469, 472-473, 479 n.20

. Drmgare pwn . eee eae aCe ee a .

ena Seg SR REECE 6 mee. RTE \ Fe ae catia eae

a :

Mt PRANK Gi titan aA

7. Collateral Estoppel Will Not Impair the Right to

Jury Trial. (Reply to Def. Supp. Mem. p. 14)

A decree entered in this non-jury equitable case would

have. no res judicata or collateral estoppel effect in subse-

quent jury trials. This precise situation was faced in Rachal

v. Hill, 435 F.2d 59 (5th Cir. 1970), cert. denied, 403 U.S.

904 (1971), where plaintiff in an action before a jury

seeking damages under federal securities laws asserted

that defendants were collaterally estopped by the judg-

ment’in’a prior non-jury action brought by the Securities

and Exchange Commission respecting the same subject

matter.

Defendants first contended that plaintiff could not rely

upon collateral estoppel, since plaintiff was a stranger to

the S.E.C. injunction action. Secondly, defendants con-

tended that collateral estoppel could not be invoked to

deprive them of a jury trial on the liability issue.

The court rejected the first contention, following the

modern view that lack of “mutuality” does not bar appli-

cation of res judicata and collateral estoppel. But it ac-

cepted the second proposition, holding that, in light of

Beacon Theatres, the order of trial could not deprive

defendants of their right to a jury on the damage claims

against them. The court reasoned (435 F.2d at 64) that:

had Hill {the plaintiff] been a party plaintiff in the

S.E.C. injunction action and there presented his claim

for damages, the appellants would have received a

jury trial on the issue of liability. It hardly makes sense

(1962). The desperate need for a retrofit remedy to diminish continuing

air pollution pending a necessarily more distant trial on damages would,

we believe, be an “imperative circumstance” calling for a prior equitable

trial even if separate trials on legal and equitable claims brought by the

same plaintiffs were involved here. ~

13:

that Hill can now assume a position superior to that

to which he would have been entitled if he had been

a party to the prior action. SS anaat yal we hold that

the application of the doctrine of collateral estoppel

was not appropriate in view of the particular circum-

stances presented by this case... -

Rachal was followed in Lynne Carol Fashions, Inc. v.

Cranston Print Works Co., Inc., No. 19,599 (3d Cir., Jan.

17, 1972) and Cannon v. Texas Gulf Sulphur Co., 323 F.

Supp. 990.(S.D.N.Y. 1971), and we are aware of no con-

flicting‘authority.

8. This Court Can. Handle This Case Efficiently and

Expeditiously With a Special Master. (Reply to Def.

Supp. Mem. pp. 13-14)

The Constitution, statutes, court rules, and previous de-

cisions give this Court wide latitude and discretion over

the manner in which it can function appropriately as a

trial court. If this Court exercises original jurisdiction here,

a special master should be appointed to preside over the

pretrial and trial proceedings. 3

While this Court could give broad powers to such a

special master without abdicating its judicial duties, guide-

lines for use of masters by district courts could be followed

here. For example, Federal Rule of Civil Procedure

53(e)(2) states: “In an action to be tried without a jury,

the court shall accept the master’s findings of fact unless

clearly erroneous.”

In discussing the scope of review of a master’s findings,

Professor Moore states:

Since mere objections [to the master’s report] would

compel the court to review the whole case, and thus

would defeat the very purpose of reference, such

rE’

—_— FEN 8 AONE

vague and general objections should be overruled.

5A Moore, FEDERAL Practice 2994 (2nd ed. 1971).

(Emphasis added )

In fact, the clearly erroneous rule stated in Rule 53(e) (2)

has the same meaning as in Rule 52(a) relating to appel-

late review of district court findings of fact. See Anderson

v. Mt. Clemens Pottery Co., 328 U.S. 680, 689 (1946);

Dyker Bldg. Co. v. United States, 182 F.2d 85 (D.C. Cir.

1950); Lupton v. Chase National Bank of City of New

York, 89 F. Supp. 393 (D.C. Neb. 1950).

Thus, traditional standards for using a special master

provide an excellent framework whereby this Court can

expedite proceedings. The taking of evidence and deter-

mination of factual disputes can be done by the master

and reviewed by this Court on the same basis that an

appellate court normally reviews factual findings by a

trial judge, and on the same basis that this Court nor-

mally reviews findings of fact by lower courts on direct

appeals. Meanwhile, this Court would decide all critical

motions and grant or deny the ultimate relief sought.

Such an arrangement would eliminate inconsistent and

conflicting results and would expedite the final determi-

nation of this litigation by avoiding the interlocutory ap-

peals and similar delaying tactics prevalent in these cases

from their inception.

LaBuy v. Howes Leather Co., 352 U.S. 249 (1937),

relied upon by defendants, supports rather than detracts

from plaintiffs’ proposal for a master in the present case.

In LaBuy, this Court held that a district. judge, clearly

competent to handle an antitrust case, abused his judicial

powers by delegating the trial to a practicing lawyer who

was not an experienced trial judge, particularly where the

judge himself was already familiar with the case because

of extensive pre-trial proceedings. The Court observed

that appointment of a busy lawyer as master usually re-

sults in a delayed decision, and emphasized that complex

cases require trial judges rather than ad hoc inexperienced

substitutes.

For this reason and for the reasons stated in Part III,

plaintiffs believe that this Court shéuld select as master an

experienced trial judge, already familiar with the issues be-

cause of extensive pre-trial proceedings, and whose efforts

will contribute to expedition, not delay, of the final deci-

sion. Plaintiffs previously suggested, and now urge that

Judge Manuel Real be appointed special master by this

Court for the fair, efficient and expeditious processing this

case requires.

9. The Equitable Relief Sought by Plaintiff States Is

the Most Appropriate Remedy for the Continuing

Loss or Damage Caused by Defendants’ Alleged

Sherman Act Violations. The Clean Air Amendments

of 1970 in No Way Detract From the Traditional

Powers of an Equity Court Sitting in an Antitrust

Case. (Reply to Def. Supp. Mem. pp. 15-33)

Defendants’ argument that this case involves “political”

considerations (see Def. Supp. Memo e.g., p. 8, heading

p. 9, and p. 24) requiring “policy decisions” ( é.g., pp.

10, 21) completely and deliberately misapprehends the

nature of this lawsuit.

The principal relief sought is a mandatory injunction

requiring defendants to cause to be installed at their

expense effective antipollution control equipment on all

pre-1968 motor vehicles in the United States (Comp. p. 13

Prayer, 4). The “disputed question of the power of any

IRE <p UNG SRA IU a ama Ss ty

court to grant such novel equitable relief” (Def. Supp.

Mem. p. 10) is no less a question appropriate for judicial

decision than is the appropriateness of a remedy in any

other suit where Section 16 of the Clayton Act is invoked

or in which a court of equity is asked to remedy a breach

of law. The power of a federal court sitting in equity has

been applied numerous times to fashion decrees uniquely

designed to remedy wrongs caused by antitrust defendants.

Thus in United States v. DuPont & Co., 366 U.S. 316

(1961), this Court ordered complete divestiture of all

General Motors stock held by DuPont, despite adverse tax

and market consequences. At 366 U.S. 323-34 it said:

The proper disposition of antitrust cases is obviously

of great public importance, and their remedial phase,

more often than not, is crucial. For the suit has been

a futile exercise if the Government proves a violation

but fails to secure a remedy adequate to redress it.

. . . If this decree accomplishes less than that, the

Government has won a lawsuit and lost a cause.

And see United States v. Grinnell Corp., 384 USS.

563 (1966) where defendants, who leased equipment,

were directed to sell on nondiscrimnatory terms, so that the

product market would be opened to competition.

Moreover, retrofit is precisely the kind of “reparative”

mandatory injunction equity courts have historically grant-

ed. See Vane v. Lord Barnard, Court of Chancery, 1716

2 Vernon 738, also reported in Prec. Ch. 454, Gilb. Eq. 127,

and 2 Salk. 161, abstracted in CHAFEE & RE, CASES

AND MATERIALS ON EQUITY 823 (5th Ed., 1967);

Kennard v. Cory Brothers & Co. [1922] L.R. 1 Ch. 265

(C.A.); 4 Restatement of Torts, Note on Terminology, at

680-81 (1939).

oa 1 GREER CR RRR TER EREAINENEL? PEER se SNH ORY Pree: MEN IRE ese eee Se

Defendants’ arguments that “the national failure to ap-

Preciate the environmental implications of vehicle and

other emissions at an early date is plainly a social and politi-

cal one” is irrelevant in the extreme when plaintiff states are

charging these defendants with long-standing violations

of the Sherman Act and fraudulent concealment of those

violations. (Comp. {19, p. 9)

Defendants rely heavily on the Clean Air Act Amend-

ments of 1970 to argue that the equitable remedy sought

by plaintiffs would amount to judicial usurpation of con-

gressional responsibility. In fact, however, the Clean Air

Act amendments forcefully dramatize the sharp contrast

between the type of political decision with which Congress

was faced and to which defendants allude, and the judicial

remedy which plaintiff states seek here. As is true with

most legislation, the 1970 act was a result of political com-

promise. It was not based on a judicial finding that the

automobile manufacturers were guilty of any wrongdoing.

By contrast, the duty of this Court or any court is to de-

cide whether a particular remedy is necessary to redress

an injury proved and, if so, to consider whether it is ap-

propriate, given the nature and seriousness of the violation.

In short, contrary to defendants’ assertion, “case by case

decisions of the judiciary” (Def. Supp. Mem., p. 21) are

completely appropriate, indeed, essential, to remedy past

violations of law.

As we have pointed out previously, (Pls.’ Reply Br., p.

15; and see Amici brief, p. 15, n. 6), the federal law

establishes standards for new cars. The remedy which

plaintiff states seek deals with pre-1968 cars, namely,

those cars manufactured and sold during the period of the

alleged antitrust conspiracy. Thus, plaintiffs are not at-

tempting to “replace, modify or accelerate the imposition

of the standards mandated by” the 1970 act (Def. Supp.

Mem., p. 20). We only seek to have defendants produce

the cars which they “would have produced” but for the

illegal conspiracy. The discussion at pages 22 through 25

of defendants’ supplemental memorandum on sources of

air pollution and the responsibility of other polluters is

totally out of piace in this case. It is, however, indicative of

the whole thrust of defendants’ argument. Defendants

would persuade this Court that, like Ohio v. Wyandotte,

supra, this case represents an effort by the states to fight

air pollution. Indeed, in their supplemental brief they.

argue this case as if it were another version of Ohio v.

Wyandotte. Yet it is unmistakably clear from the complaint

and our arguments to date, that this is an antitrust case.

Liability depends entirely on antitrust principles and the

relief sought depends entirely on equitable powers em-

ployed to mold antitrust remedies. True, the subject matter

of the violation is motor vehicle air pollution. But this

case is an air pollution case only in the sense that another

major anti-trust case, Associated Press v. United States,

326 U.S. 1 (1945.), was a newspaper case, as the defend-

ants in that case, invoking the First Amendment, unsuc-

cessfully argued.

Defendants argue as well that this case deals with mat-

ters of “an unusually complex and technical nature” (Def.

Supp. Mem., p. 11) and “with the frontiers of an arcane

and still imperfectly understood technology” (Def. Supp.

Mem., p. 11). But plaintiffs are prepared to prove that time

and again throughout the fifteen-year history of the al-

leged conspiracy, defendants, who controlled most of the

fn: mies eta areas ‘ Ne ea ROI ee NS —

19 .

technology in the field, misled and misrepresented the

facts to various state, federal and local government agen-

cies. Until this evidence can be made public, it will be im-

possible to know whether defendants are now accurately

representing the facts to this Court or any court or even

accurately represented the facts to Congress when it en-

acted the Clean Air Amendments. of 1970.

10. In Any Event, Defendants’ Argument Regarding

Relief Is Totally Premature. (Reply to Def. Supp.

Mem. pp. 15-33)

In support of their motion to dismiss in MDL Docket

No. 31, defendants made the same argument respecting

equitable relief sought which they make here. Judge Real

disposed of that argument summarily, stating, inter alia:

Plaintiffs may fail in their proof, but until then they

should be given the benefit of employing “any avail-

able male to make good the wrong done.” Bell v.

Hood, 327 U.S. 678, 684 (1946); J. I. Case Co. v.

Borak, 377 U.S. 426, 433 (1964). Memo Order (Re

Motion to Dismiss ) p.3.

It may well be that a trial judge, after hearing the

evidence may determine that the grant of an injunc-

tion which parallels the relief of the consent decree

in action 69-75-JWC is unwarranted. But pre-judging

at this stage of the litigation, that plaintiffs may not

be able to present some peculiar need for further in-

junctive relief is not the function of this Court. The

prayers for relief are within the jurisdiction of this

Court grant given the proof of facts alleged. Whether

it is necessary or desirable is for the trial judge or

development of these cases to where they may be

subject to disposition without trial. Memo Order (Re :

Motion to Dismiss) p.4.

This reasoning applies equally here.

PART III.

RECENT DEVELOPMENTS

11. Recent Developments Confirm the Need for Original

Jurisdiction to be Exercised.

This original action is integrally related to the actions

pending before Judge Manuel Real in MDL No. 31. From

the beginning, the position of plaintiff states in this action

has consistently been to seek one trial of the equitable is-

sues, and one nationwide injunction in the speediest pos-

sible manner. The goals of one speedy trial and one nation-

wide injunction were and are the reasons for urging this

Court to exercise its original jurisdiction. (See Pl. Br. in

Supp. of Motion, pp. 19 and 22; Pl. Supp. Mem., p. 8; Reply

Br., p. 14.)

The remaining governmental plaintiffs equally desire a

speedy unified trial on the equitable issues and, with the

exception of California and Philadelphia, have agreed to

withdraw their claims for damages in the district court pro-

ceedings, if they can obtain that result. The positions of

California and Philadelphia are not final.

Conversely, defendants have been engaged from the out-

set in a program of proliferation and protraction. They op-

pose unified trial of the antitrust issues both here (Br. in

Opp. pp. 19-20; Def. Supp. Mem., p. 35) and in MDL

No. 31.

Defendants are equally resistant to an early trial. In their

Supplemental Memorandum (page 11) the threat of

lengthy proceedings is scarcely veiled. After observing

that “major antitrust cases usually require years of pre-

trial and trial proceedings,” they complain about how the

present case is allegedly even more complex and diff-

Phe er Soro fe lamet'y EEE OL ep OND IR om ON, OE, Ha i eee ee L

cult. The implication left about how long this case will

take is clear.

It becomes apparent, however, why these prophecies of

interminable litigation are cultivated. After criticizing re-

trofit for pre-1968 cars as an unfeasible remedy, defend-

ants observe (at page 31) that uncontrolled used vehicles

on the road are a “constantly shrinking number.” It is their

goal to delay resolution of the issues raised by these cases

until the effectiveness of retrofit and, consequently, the ex-

pense to defendants if plaintiffs obtain the equitable relief

sought will have dissipated through the passage of time.

Defendants are aware that an effective retrofit is avail-

able. A statement by Chrysler Corporation, packaged with

a retrofit device it is now marketing, states:

Combined with an engine tuneup, the device cuts

emissions on older vehicles by an average of 50% in

hydrocarbon, 50% in carbon monoxide, and about

30% in oxides of nitrogen.

Similarly, General Motors advertises a “low-cost emission

control system” for pre-1967 cars, which, together with an

engine tune-up, will reduce emissions by 50 percent. Wash-

ington Post, April, 1970.

If a speedy trial on the equitable issues is denied plaintiff

states, such devices will probably never be installed at de-

fendants’ expense on a nation-wide basis, and the injury

caused by defendants’ conspiracy will go unremedied.

Such a result will be particularly unfortunate when defend-

ants themselves have conceded that “[i]f every car pro-

duced before 1969 had [available retrofit devices], our air

would be.as pure as it was 30 years ago.” (John DeLorean,

Vice President of General Motors in charge of Chevrolet

Division, Look Magazine, p. 57, August 25, 1970).

. : . —

SS a a uinimiiii , yur Ore Tete

Recent developments in MDL No. 31 show that, if

certain legal hurdles are cleared, a speedy trial, specifically,

a trial starting in December 1972, on the equitable issues

only, can be achieved.

To show the significance of these recent developments in

MDL No. 31 and their direct relationship to the motion of

plaintiff states for leave to file their proposed complaint

here as an original action, a summary recapitulation of the

Motor Vehicle Air Pollution Antitrust litigation is neces-

sary.

In early 1969 the Justice Department filed a civil action

charging defendants with conspiracy to eliminate compe-

tition in research, development, manufacture and installa-

tion of motor vehicle air pollution control equipment. That

case was settled by a consent decree which simply forbade

continuance of the alleged illegal combination, despite

strenuous objections from many major public bodies that

the consent decree relief was inadequate. United States

v. Automobile Manufacturers Ass'n., 307 F. Supp. 617

(C.D. Cal. 1969), affd. sub. nom. City of New York v.

United States, 397 U.S. 248 (1970).

Following entry of that decree, a number of states and

other governmental entities filed antitrust suits similar to

Count I of the present case in federal district courts

throughout the United States.

The actions filed in the district courts by the govern-

mental entities are suits for equitable relief and treble

damages. The state plaintiffs in the district court actions

have sued both in their capacity as parens patriae and

pursuant to Rule 23 of the Federal Rules of Civil Procedure

as representatives of a class consisting of all political subdi-

visions within their state. These actions were all transferred

2 SOD EOE Scart Reine eR SUR age eeterR eR Tee REE NS (rRIoh eye Muerte — , — ——

23 |

to the United States District Court for the Central District

of California, Judge Manuel Real, as MDL No. 31, pur-

suant to 28 U.S.C. $1407.

The present activu was filed in this Court by fifteen states

on August 5, 1970. Three additional states were subse-

quently granted leave to join as plaintiffs. See 91 S. Ct.

2272. This action was brought by plaintiffs in their capa-

city as parens patriae on behalf of the citizens of their

respective states for equitable relief only. The proposed

complaint does not claim to be a class action. It does not

seek monetary damages. The sole purpose of this action

was and is to obtain equitable relief in the form of a

mandatory (reparative ) injunction for the continuing “loss

or damage” inflicted upon the citizens and property of the

plaintiff states by defendants’ antitrust conspiracy.

While plaintiffs’ motion was pending it became evi-

dent that applicable statutes of limitation might run. To

foreclose that risk, in March 1971 plaintiff states herein

filed “standby” district court actions. See telegram to Clerk

of Supreme Court dated April 15, 1971, Appendix A.

Eleven of these states filed separate antitrust actions in

their own districts. The remaining seven plus Nevada

filed one consolidated action in the Central District of

California.

These “standby” actions were added to all the other

district court actions previously transferred to Judge Real,

as MDL Docket No. 31. These MDL actions include

complaints filed by a total of thirty-four states and six

other governmental entities in twenty-three federal districts

in all ten circuits,

In August 1971 sixteen states and the City of New York |

which had all initially filed district court actions urged

this Court, as amici curiae, to assume original jurisdiction

of this case and stated their intention to seek leave to

join this action as plaintiffs if that jurisdiction is exercised.®

On January 24, 1972, all of the multi-district plain-

tiffs, including plaintiffs herein, submitted to Judge Real

a proposed program of further pretrial and trial pro-

ceedings in which they stated that the plaintiffs in all

but two of the governmental cases would drop all claims

for damages if a consolidated trial before Judge Real

on the remaining equitable claims would be scheduled

not later than December 1972. Defendants uniformly

opposed this program. ?

Plaintiffs in the present case informed Judge Real that

their need for an exercise of original jurisdiction by the

Supreme Court would no longer exist if a firm and pre-

servable consolidated trial date before Judge Real could

be set for December 1972. They further stated:

If, however, this court cannot assure a preservable

1972 trial date because of issues sub in the

Ninth Circuit, other possible interlocutory appeals or

petitions for certiorari which defendants might pur-

sue, or any other reason, then these plaintiffs, to ac-

complish their qmginal pomposs of a speedy ffial on

the equitable issues, will continue to pursue actively

their original action before the Supreme Court. That

ursuit will obviously not be designed to preclude

fate actions by this court, but rather, as we have

earlier suggested to the Supreme Court, to expedite

resolution of both this multidistrict litigation and the

original action. Toward that end, we support a De-

cember 1972 trial date by this court in any event.

One other aspect of this litigation is crucial in determin-

5. This Court has previously indicated that intervention of non-state

plaintiffs would be permitted in an original action under appropriate

circumstances. See New Jersey v. New York, 345 U.S. 369, 373 (1953).

Paik Delia hia lean iinet on ———

ing whether this Court should exercise its original juris-

diction. In MDL No. 31, defendants moved to dismiss the

governmental complaints based upon defendants’ inter-

pretations of the antitrust laws set forth at 6-7, supra.

Following denial of these motions, six cases were certified

for appeal pursuant to 28 U.S.C. §1292(b). Oral argument

in the Ninth Circuit occurred on January 13, 1972, where

the issues are now sub judice.

A hearing was held before Judge Real on February 17,

1972, (five days before the filing of this brief) on the

question of whether plaintiffs’ proposed program for ex-

pedited pretrial proceedings and a December 1972 trial

date should be adopted.

At the conclusion of that hearing, Judge Real adopted the

following program:®

1. He ruled that “at least until the order of the Court of

Appeals comes down” he would limit discovery and pro-

ceed with the schedule basically as proposed by plaintiffs

on the equity issues only at this time.’

2. He set a further pre-trial hearing for March 7, 1972 for

consideration of proposed notices to the classes that have

been allowed in MDL No. 31, indicating plaintiffs’ inten-

tion to withdraw their damage claims, contingent upon set-

ting a December 1972 trial date and giving class members

a right to opt out of that decision.

3. He denied the motion of plaintiffs to sever [or with-

6. Pertinent portions of the transcript of that hearing before Judge

Real held at Los Angeles, California on Thursday, February 17, 1972,

are attached as Appendix B.

7. Plaintiffs’ proposed pre-trial schedule calls for completion of first

wave discovery by June 30, 1972; and commencement of second wave

discovery on August 15, 1972; and commencement of trial on December

4, 1972.

draw] their damages claims, without prejudice to renew

after a hearing upon the proposed class notices, and a

determination of the class action.

4. He deferred until after resolution of the class questions

a proposal to issue an order to show cause why the actions

filed in other districts should not be transferred to the

Central District of California under 28 U.S.C. §1404.

Thus, in light of Judge Real’s ruling on February 17,

1972, the case is proceeding with a discovery program

tentatively geared to a target trial date in December 1972

on the equitable claims only.

: 2 There are, however, at least four roadblocks which must

be cleared before the December trial date becomes a real-

ity. They are: (1) the requirement of notice to the govern-

mental classes and responses by the class members; (2)

defendants’ vigorous resistance to any transfer of all equity

cases to the Central District of California under 28 U.S.C.

§1404 (Transcript of Proceedings, February 17, 1972, p. »

51.); (3) the possibility of certiorari to this Court and a re-

quest for stay of the trial date by defendants if they lose

their interlocutory appeal now sub judice in the Ninth Cir-

cuit; (4) the possibility that defendants will seek interlocu-

tory appeal or mandamus, coupled with a stay, if Judge

Real transfers pending cases to his district under 28 U.S.C.

§1404.

Moreover, even if a December 1972 trial is obtained

before Judge Real, but not under the original jurisdiction

of this Court, the possibility of protracted appeals could

delay relief at least an additional year.

aa a ena ee sna

CONCLUSION

The reason all governmental plaintiffs conditioned their

decision to withdraw damages claims upon a speedy

equitable trial is crucial. This conditional withdrawal of

damages is not, as defendants argue, an effort to bargain

with the trial court. Rather, it represents a difficult but

realistic decision about the most effective remedy for

- the wrong committed by defendants. This decision was

inextricably tied to the realities of automotive air pollution.

As stated by the Secretary of Health, Education and

Welfare in his March 1970 report to Congress in compli-

ance with Public Law 90-148 (The Air Quality Act of

1967), atmospheric changes caused by pollution are

occurring,

... at least in part, because the parece atmosphere

in toto is a closed system, and the natur. atmospheric

cleansing mechanisms are incapable of dealing with

the great quantity of contaminants emitted. This is in

contrast to a regional environment, where polluted

masses of air frequently are swept away by the free

movement of weather systems. Report, p. 73.

Defendants estimate that 50 million pre-1968 cars now

on the road would be subject to retrofit if plaintiffs obtain —

the relief they seek. Approximately 8 million of these pre-

1968 cars leave the road each year and that rate may

accelerate in the future. Thus, irreparable harm to the

atmosphere and to health not only continues, but the “res”

of the equitable claims is rapidly disappearing while the

harm it caused remains in the air indefinitely.

If equitable relief can be obtained during 1973, then

the equitable remedy sought will be effective, invoked

in sufficient time to reduce substantially or eliminate air

"TERR NER. crores peoNtetryay-ceRien ie ny Mere ye om aa a ii “Seg i

SS (EN a ooo SUR SERINE REA Som ENeE URTIAYS SET

pollution from pre-1968 vehicles. However, if defendants

succeed in delaying a trial, the relative value of retrofit

will be diminished. And at some point, as more and more

pre-1968 cars leave the road, money damages for past

injuries will be the only available remedy. If that occurs,

numerous jury trials in many district courts and appeals

to this Court through a number of circuits will probably

result.

This parens patriae action for equitable relief only,

presents none of the obstacles raised by defendants in

MDI 31. There are no problems of class notifcation and

no problems of transfer by a §1407 transferee judge to

himself under 28 U.S.C. §1404.* The other siate plaintiffs

have stated that they would intervene in this action if

original jurisdictign is exercised. By exercising that juris-

diction and appointing Judge Real master with instructions

to proceed with trial as expeditiously as possible, this Court

can eliminate the possibility of protracted jury trials, diffi-

cult legal and factual questions relating to measuring and

allocating money damages, diverse appeals, and most

importantly, this Court can preserve the possibility of the

one remedy most fitted to the wrong charged.

Respectfully submitted,

Dated February 22, 1972.

STATE OF WASHINGTON

SLADE Gorton, Attornev General

8. Judge Real, apparently seeking a way tu avoid these problems,

suggested to plaintiffs’ counsel that plaintiffs consider filing new cases in

the Central District of California as parens patriae suits for equitable

relief only. Unfortunately, as recognized by plaintiffs’ counsel, this

“solution” would raise serious, probabiy fatal, statute of limitations

questions. (Transcript of Proceedings, p. 181)

—_— REPRE AREANRTT EF EEL NES IGT GERERNINN SALI IN RI FERN OA BE UNHELY

Frepric C. TAusEnp,

Davin G. Kniss, Special Assistant

Attorneys General

657 Colman Building

Seattle, Washington 98104

Wi.u1aM L. Dwyer, Special

Assistant Attorney General

Hoge Building

Seattle, Washington 98104

STATE OF ILLINOIS

WILLIAM “5 ScoTT, Attorney

Gener:

Rosert S. ATxuns, Assistant

Attorney General

188 West Randolph.

Chicago, Illinois 60601

Davin C. Lanperar, Assistant

Attorney General

STATE OF ARIZONA

Gary NELson, Attorney General

MALCOLM P. STROHSON, Assistant

Attorney General

STATE OF CoLoRADO

Duke W. Dunszar, Attorney

: ageree n

OHN Moore, Deputy Attorney

General

W1.L1AM Tucker, Assistant

Attorney General

STATE OF Hawan

BERTRAM T. KANBARA, Attorney

General

GEORGE Pal, ay

Attorney Gene

STATE OF Iowa

RICHARD C. TURNER, Attorney

General

BOT LIR ENR RR. lg

SCHWEPPE, DOoLITTLE, Kruc,

TAUSEND, BEEZER & BEIERLE

Of Counsel.

POE a aeagpetas

STATE OF KANSAS

KENT FR1zzEL, Attorney General

RICHARD HaysE, Assistant

Attorney General

STATE OF MAINE

JaMEs S. Erwin, Attorney General

COMMONWEALTH OF MASSACHUSETTS

Rosert H. Quinn, Attorney

General

NEAL Co iccuio, Assistant

Attorney General

STATE OF MINNESOTA

Douglas M. Head, Attorney

~ General

STATE OF MIssouRI

Joun C. Danrortu, Attorney

General

STATE OF OHIO

Paut W. Brown, Attorney General

DoNnaLp WECKSTEIN, Assistant

Attorney General -

STATE OF RHODE IsLAND

- HERBERT F.. DESIMONE, Attorney

General

STATE OF VERMONT

JaMEs M. Jerrorps, Attorney

General

James D. Hansen, Assistant

Attorney General

COMMONWEALTH OF VIRGINIA

ANDREW P. MILLER, Attorney

General

ANTHONY F. Troy, Assistant

Attorney General

aN eae to eee et ee SRG x7

Oo dteaeeteecnaienemiemientteremeeaeeaineteeneemnemneeeensantiomanena nee teed es

A-1l

APPENDIX ‘A

Telegram Dated April 15, 1971

Honorable E. Robert Seaver, Clerk

Supreme Court of the United States

Washington, D. C. 20543

Dear Sir:

Re: State of ‘’ashington, et al., Plaintiffs,

v. General Motors Corporation, et al.,

Defendants, O.T. 1970, No. 45 Original

We did not receive the April 7, 1971 letter of Howard

P. Willens, attorney for defendant Automobile Manufac-

turers Association, Inc., in the above entitled matter until

April 14, 1971, it having been mailed with his letter to

the Court dated April 12, 1971 and postmarked in Wash-

ington, D. C. on April 12. We respectfully request that the

facts stated in this telegram be called to the attention of

the Court at the same time that you present the facts

stated in Mr. Willens’ letters.

Fifteen of the seventeen actions to which Mr. Willens

refers were filed in various federal district courts by the

states which are plaintiffs in the above entitled original

action during the weeks of March 8 and March 15, 1971.

These actions were all filed as “standby” actions solely

for the purpose of protecting the rights of said s‘ates

against any argument that the one year limitations period

provided by 15 U.S.C. § 16(b) had expired while the

Supreme Court was considering the states’ motion, for

leave to file a complaint in original action No. 45.

While we are of the opinion that the pendency of plain-

tiffs’ motion for leave to file the complaint would toll the

. ern ms a + PRES a

a DMITRI we , ATS essere

* | A-2

running of the pertinent statute of limitations and while

we further believe that our atguments in favor of the

Court's exercising its original jurisdiction are sound, in

_ the absence of a case precisely on point in respect to the -

statute of limitations question, we concluded that the

substantive issues presented by this litigation are too im-

portant to take any risk, no matter how minimal, that a

statute of limitations argument could be urged by ‘the

defendants if this Court moce not exercise its ori¥inal

jurisdiction. S

Court the fact that the cases filed by the seventeen plain-

_ tiff states as “standby” actions have been filed in twelve

different federal districts. While, as counsel for the defend-

ant Automobile Manufacturers Association, Inc. points out,

each of these cases is in the process of being transferred,

pursuant to Section 1407 of the Judicial Code, to the Cen-

tral District of California for pretrial proceedings, the

eleven cases filed in districts other than the Central Dis-

trict of California will, pursuant to Section 1407, all be

returned to their original districts for trial. Thus, if the

Supreme Court refuses to exercise its original jurisdiction

in the above entitled case the butden on the total federal

judicial system of multiple trials referred to at pages 4-8

of Plaintiffs’ Reply Brief In Support Of Motion For Leave

To File Complaint are even more extensive than was the

case when that reply brief was filed.

Furthermore, as pointed out in Plaintiffs’ Reply Brief,

pages 8-10, it is by no means clear that the District Court

for the Central District of California would exercise pen-

_ dent jurisdiction of Count III, the nuisance count.

: | A-3

On behalf of the plaintiff states in the above entitled

case we request that the Court be informed that all plain-

tiff states reaffirm and renew their motion for leave to file

complaint as an original action in the above entitled mat-

ter. If the Court seeks further explanation of the filing of

the “standby” actions, we request the opportunity to file

a brief or an extended statement of reasons.

Copies of this telegram are being sent by mail to all

defense counsel and to co-counsel for Plaintiff States. —

a Fredric C. Tausend

+ _ Special Assistant Attorney Géneral

State of Washington

One of the attorneys for Plaintiff States

in Original Action No. 45

A-4

APPENDIX B

Transcript of Proceedings, February 17, 1972

“Tye Court: All right, 2:00 P.M. on March 6, 1972

for consideration of notice to the classes that have been

allowed by this Court thus far so that I have that in

_. mind, and that is to be submitted by each of the plain-

tiff representatives on the class which they represent,

the kind of notice that would indicate that there is the

proposed dismissal. General notice of the class, why, I

think we can get that done at the same time and not

waste a notice. General notice of the class, the right to

opt out and the question that there has been presented

to the Court a situation in which damage actions are

proposed to be dismissed upon the determination of a

trial date no later than December 4, 1972, or whatever

that date is—that kind of a date. So that we have in

mind what we are talking about in terms of the class.

The motion to sever, so the record will be clear, is

_ denied at this time without prejudice to the plaintiffs

after the determination of the class action and hearing

upon the proposal of the class on the notice. . . .

“THE Court: No. The proposed notice should indi-

cate that the hearing upon that notice in terms of the

declaration of the class opting out will be at a certain

time and for the dismissal of the damage actions upon

the condition that a trial date be set.

“Mr. SuHapiro: And I assume that the trial date will

be December 4, as we indicated?

“THE Court: At least that indication can be put in

the notice. Maybe at that time there may be some mod-

ification of that, but we can decide that before the

notices go out.... 3 o

“THE Court: I propose in any circumstance, Mr.

Shapiro, at least until the order of the court of appeals

comes down, to at least limit the discovery and proceed

with the schedule basically as proposed by the plain-

tiffs on the equity issue only at this time.

“Mr. Suapino: All right, your Honor. The only thing

I was concerned about, however, was the order to

That is the only other remaining thing that has not

been touched on. ts :

_ “Tue Court: Okay. The defendants have raised a

_ question. As long as you are going to injunctive relief,

Mr. Shapiro, you might think about the fact that you

can file the cases in this district without any problem.

“Mr. SHaprro: My problem is this. I may have—

may have—this is my problem—I may have a very

serious problem with regard to that with regard to the

question of the limitations. How do I stop a case and

start it all over again? That would be a perfect

solution. :

2°

Supreme Court

Vv.

WALTER J. WILLIAMS

14250 Plymouth Road

Detroit, Michigan 48232

FORREST A. HAINLINE, JR.

Cross, WROCK, MILLER &

VIESON

Penobscot . Building

Detroit, Michigan 48226

Attorneys for Defendant

American Motors

Corporation

LLoyD N. CUTLER

Louis F. OBERDORFER

JAMES S. CAMPBELL

WILMER, CUTLER & PICKERING

900 - 17th Street, N.W.

Washington, D.C. 20006

JULIAN O. VON KALINOWSKI

PAUL G. BOWER

GIBSON, DUNN & CRUTCHER

634 South Spring Street

Los Angeles, California 90014

Attorneys for Defendant

Automobile Manufacturers

Association, Inc.

Tom KILLEFER

PAUL A. HEINEN

WILLIAM E. HuTH

Chrysler Corporation

840 Massachusetts Ave. -

Detroit, Michigan 482381

G. WILLIAM SHEA

PHILIP K. VERLEGER

& SHEA

. 80th Floor

8435 Wilshire Blvd.

Los Angeles, California 90010

Attorneys for Defendant

Chryslcr Corporation _

IN THE

of the United

OCTOBER TERM, 1971

STATE OF WASHINGTON, ET AL.,

GENERAL MOTORS CORPORATION, ET AL.,

| Defendants

Plain

PE “oe Court, U.S

FILED

FEB 22

Proscar SEAVER, CUB

DEFENDANTS’ MEMORANDUM ON SOURCE OF LAW

Ford Motor Company

“The American Road

Dearborn, Michigan 48121

ROBERT L. STERN

_ ROGER W. BARRETT

MAYER, BROWN & PLATT

281 South LaSalle Street

- Chicago, Illinois 60604

CaRL J. SCHUCK

ERNEST E. JOHNSON

OVERTON, LYMAN: & PRINCE

550 South Flower Street

Los Angeles, California 90017

Attorneys for Defendant

Ford Motor Company

Ross L. MALONE .

ROBERT A. NITSCHKE _.

General Motors Building

Detroit, Michigan 48202

HAMMOND E. CHAFFETZ

JOSEPH DUCOEUR

KIRKLAND & ELLIS

Prudential Plaza

Chicago, Illinois 60601

MARCUS MATTSON

RICHARD F. OUTCAULT, JB.

LAWLER, FELIX & HALL

605 West Olympic Boulevard

Los Angeles, California 90015 .

Attorneys for Defendant

General Motors Corporation

McCUTCHEN, BLACK, VERLEGER—_____

| A. Source of Law

Count I

Couftt II

Count III

B. Availability of Alternative Forums

TABLE OF AUTHORITIES

Cases:

Apex Hosiery Co. V. Leader, 310 U.S. 469 (1940) ..

Arkansas v. Texas, 346 U.S. 368 (1953)

Banco Nacional de Cuba v. Sabbatino, 376 U.S.

398 (1964)

Bank of America v. Parnell, 352 U.S. 29 (1956) -.

Clearfield Trust Co. v. United States, 318 US. 363

(1943)

Erie R. Co. v. Tompkins, 304 U.S. 64 (1938)

Georgia Vv. Tennessee Copper Co., 206 U.S. 230

(1907)

Hanna Vv. Plumer, 380 U.S. 460 (1965)

Hinderlider v. La Plata River Co., 304 U.S. 92

~ (1938) |

Ivy Broadcasting Co. v. American Telephone &

Telegraph Co., 391 F. 2d 486 (2d Cir. 1968)

J. I. Case Co. v. Borak, 377 U.S. 426 (1964)

Klaxon Co. v. Stentor Mfg. Co., 3138 U.S. 487

(1941)

Ohio v. Wyandotte Chemicals Corp., 401 U.S. 4938

(1971) 6, 9, 10, 12

Parker v. Brown, 317 U.S. 341 (1943) 3

Romero v. International Terminal. Operating Co.,

358 U.S. 354, 398 ( 1959) (opinion of Brennan,

J.)

Rosado v. Wyman, 397 U.S. 397 (1970)

Silver v. New York Stock Exchange, 373 U.S. 341

(1963)

Textile Workers Union v. Lincoln Mills, 358 U.S.

448 (1957)

Texas V. New Jersey, 379 U. S. 674 (1965)

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.