Appendix — American Pipe & Constr. Co. v. Utah

Supreme Court brief1974

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Text

viii.

Page

Affidavit in Support of Motion to Intervene—

David B. Brinton 405

Affidavit in Support of Motion to Intervene—

Randall J. Heaps 406

Affidavit in Support of Motion to Intervene—Don

C.. Pierce 407

Affidavit in Support of Motion to Intervene—Ed-

ward H. Southwick 408

Affidavit in Support of Motion to Intervene—J.

Bracken Lee 409

Affidavit in Support of Motion to Intervene—

Arnold Anderson 410

Affidavit in Support of Motion to Intervene—

Henry Beckstead 411

Affidavit in Support of Motion to Intervene—

Jack A. Richards ..... 412

Affidavit in Support of Motion to Intervene—

David B. Brinton ...... 413

Affidavit in Support of Motion to Intervene—

Doren B. Boyce 414

Affidavit «in Support of Motion to Intervene—

Richard A. Chambers 415

Affidavit in Support of Motion to Intervene—

Jack L. Crellin 416

Affidavit in Support of Motion to Intervene—Ned

F. Wilson 417

Affidavit in Support of Motion to Intervene—

Gordon B. Christenson 418

Affidavit in Support of Motion to Intervene—

Glenn W. Adams ...............000....... 419

ix.

Affidavit in Support of Motion to Intervene—

Glenn A. Wright 420

Affidavit. in Support of Motion to Intervene—

Buell Bennett 421

Affidavit in Support of Motion to Intervene—

JC, CR cscs cetccccsatncecneseorienirinrneciees 422

Affidavit in Support of Motion to Intervene—

T. John Labrum 423

Affidavit in Support of Motion to Intervene—

Roscoe W. Godfrey 424

Affidavit in Support of Motion to Intervene—

William C. Hague 425

Affidavit in Support of Motion to Intervene—

John Jorgensen ......... 427

Affidavit in Support of Motion to Intervene—

Walter W. Brock 428

Request for Admission. Dated: January 22, 1970.. 429

Points and Authorities of Defendants in Opposi-

tion to Motions to Intervene and to Amend ...... 435

Affidavit of Oliver F. Green, Jr., in Opposition

to Motion to Intervene as Plaintiffs or in the

Alternative, to Amend the Complaint to Add

Additional Parties . 464

Affidavit of Haldor T. Benson 468

Supplemental Memorandum of Utah Concrete

Pipe Company in Opposition to Motions to

Intervene and to Amend 475

Affidavit of Amos Clements 478

Affidavit of Dominic B. King 480

Decision on Motions to Intervene, Amend, Etc.

dated March 26, 1970 482

Page |

Intervenors’ Amended Complaint [Proposed] ...... 503

Findings of Fact, Conclusions of Law, and Order ;

on Motions to Intervene and to Amend ....___ SOS

Notice of Appeal dated July 31, 1970 2 509 -;

Motion to Extend Time for Appeal ooo... S11 %

Notice of Appeal dated August 25, 1970... 520 |

Order Extending Time Within Which to Appeal .. 521

Agreed Statement on Appeal Pursuant to Rule

10(d) of the Federal Rules of Appellate Pro-

cedure . 522

Summary of Dates 22 530

Order of United States Court of Appeals. Appears

in Petition for Writ of Certiorari, Appendix A,

pege Tn 535

Opinion of United States Court of Appeals. Ap-

pears in Petition for Writ of Certiorari, Ap-

pendix D, pages 33-39 535

IN THE

Supreme Court of the United States

October Term, 1972

No. 72-1195

AMERICAN PIPE AND CONSTRUCTION Co., et al.,

Petitioners,

vs.

STATE OF UTAH, et al.,

Respondents.

ON WRIT OF CERTIORARI TO THE UNITED

STATES COURT OF APPEALS FOR THE

NINTH CIRCUIT.

APPENDIX.

In Two Volumes.

Volume I.

(Pages 1 to 312).

Date

1954 to a date four years

preceding the filing of the

Complaint

1958 to a date four years

. preceding the filing of the

Complaint

December 31, 1962

March 10, 1964

June 19, 1964

APPENDIX.

CHRONOLOGICAL LIST OF IMPORTANT DATES ON

WHICH PLEADINGS WERE FILED, HEARINGS HELD

AND ORDERS ENTERED.

Event

Complaint Period for Con-

crete Pipe Alleged in Pro-

posed Amended Complaint

of Interveners (A. 503; R.

441)

Complaint Period for Steel

Pipe Alleged in Proposed

Amended Complaint of In-

terveners (A. 503;R.441)

End of Period of Alleged

Conspiracies (A. 484, n.

2; R. 449, n. 2)

Return of Five Indictments

Upon Which Utah Com-

plaint is Based (Unit-

ed States District Court,

Southern District of Cali-

fornia, Central Division)

(A. 11-51; R. 8-46)

Criminal Cases Terminated

With Judgments on Nolo

Pleas (United States Dis-

trict Court, Southern Dis-

trict of California, Central

Division) (A. 52-71; R.

48-68)

ae Le

Date Event

June 23, 1964 Five Civil False Claims

Actions Instituted by United

States of America (Unit-

ed States District Court,

Southern District of Cali-

fornia, Central Division)

(A. 72-139; R. 70-134)

October 28, 1964 Amended Complaints Filed

by United States of Amer-

ica to Prevent and Restrain

Violations of Sherman Act

(United States District

Court, Southern District of

California, Central Divi-

sion) (A. 140231; R.

136-228)

December 8, 1967 Consent Decrees Filed and

Entered in Civil Actions as

to All Defendants Except

American Pipe and Con

struction Co. (United

States District Court, Cen-

tral District of California)

(A, 232-83; R. 230-84)

May 24, 1968 Final Judgment as to Amer-

ican Filed (United States

District Court, Central Dis-

trict of California) (A.

284-312; R. 286-315)

May 27, 1968 Final Judgment as to Amer-

, icgn Entered (United

States District Court, Cen-

tral District of California)

(A. 284-312; R. 286-315)

————————

Date Event

December 8, 1968 One Year After Consent

Decrees Entered in Civil

Actions as to All Defend-

ants Except American Pipe

and Construction Co.

May 13, 1969 Complaint Filed by State

of Utah (United States

District Court, District of

Utah, Central Division) *

(A. 313-40; R. 317-40)

May 24, 1969 One Year After Final Judg-

ment as to American

December 4, 1969 Order Entered by Judge

Martin Pence “that the ac-

tion herein may not be

maintained as a class ac-

tion and, no parties having

joined therein the class ac-

tion * * * in all respects

stands terminated as of

May 13, 1969.” (Unit-

ed States District Court,

Central District of Cali-

fornia) (A. 34445; R.

346-47)

December 12, 1969 Motion to Intervene as

Plaintiffs by Certain Re

spondents Filed (United

States District Court, Cen-

tral District of California)

(A. 355-59; R. 359-63)

"_ *Transferred to Judge Pence in United States District Court,

Central District of California August 20, 1969, by the Judicial

Panel on Multidistrict Litigation.

a i

Date Event

December 29, 1969 Motion to Intervene as

7 Plaintiffs as to Additional

Respondents Filed (United

States District Court, Cen-

tral District of California)

(A. 386-87; R. 364-66)

March 30, 1970 Decision of Judge Martin

Pence Entered Denying

Respondents’ Motion to

Intervene (United States

District Court, Central Dis-

trict of California) (A.

482-502; R. 447-65)

June 23, 1970 Findings of Fact and Order

Denying Respondents’ Mo-

tion to Intervene Filed

(United States District

Court, Central District of

California) (A. 505-08; R.

443-45)

December 11, 1972 Opinion by Divided Court

(United States Court of

Appeals for the Ninth Cir-

cuit) Filed Reversing the

Order of the Trial Court

Denying Intervention (Ap-

pendix E, Petition for Writ

of Certiorari, 40-48)

January 31, 1973 Amended Opinion by Di-

vided Court (United States

Court of Appeals for the

Ninth Circuit) Filed Re-

versing Order of the Trial

Court Denying Interven-

tion (Appendix D, Peti-

tion for a Writ of Certio-

rari, 33-39)

PERTINENT TEXT OF STATUTES, FEDERAL RULES

AND REGULATIONS INVOLVED.

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

ton Act of October 15, 1914, c. 323, § 4, 38 Stat. 731):

“Any person who shall be injured in his busi-

ness or property by reason of anything forbidden

in the antitrust laws may sue therefor in any dis-

trict court of the United States in the district in

which the defendant resides or is found or has

an agent, without respect to the amount in contro-

versy, and shall recover threefold the damages

by him sustained, and the cost of suit, including

a reasonable attorney’s fee.”

2. United States Code, Title 15, Section 15a (Clay-

ton Act of October 15, 1914, c. 323, § 4A, as added

July 7, 1955, c. 283, § 1, 69 Stat. 282):

“Whenever the United States is hereafter in-

jured in its business or property by reason of any-

thing forbidden in the antitrust laws it may sue

therefore in the United States district court for

the district in which the defendant resides or is

found or has an agent, without respect to the

amount in controversy, and shall recover actual

damages by it sustained and the cost of suit.”

3. United States Code, Title 15, Section 15b (Clay-

ton Act of October 15, 1914, c. 323, § 4B, as added

July 7, 1955, c. 283, § 1, 69 Stat. 283):

“Any action to enforce any cause of action un-

der sections 15 or 15a of this title shall be for-

ever barred unless commenced within four years

——

after the cause of action accrued. No cause of

action barred under existing law on the effective

date of this section and sections 15a and 16 of this

title shall be revived by said sections.”

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

(Clayton Act of October 15, 1914, c. 323, § 5(b), 38

Stat. 731, as amended July 7, 1955, c. 283, § 2(b),

69 Stat. 283):

“Whenever any civil or criminal proceeding is

instituted by the United States to prevent, restrain,

or punish violations of any of the antitrust laws,

but not including an action under section 15a of

this title, the running of the statute of limitations

in respect of every private right of action arising

under said laws and based in whole or in part on

any matter complained of in said proceeding shall

be suspended during the pendency thereof and for

one year thereafter: Provided, however, That when-

ever the running of the statute of limitations in re-

spect of a cause of action arising under section 15

of this title is suspended hereunder, any action to

enforce such cause of action shall be forever barred

unless commenced either within the period of

suspension or within four years after the cause of

action accrued.”

5. Rule 3, Federal Rules of Civil Procedure:

“COMMENCEMENT OF ACTION

A civil action is commenced by filing a com-

plaint with the court.”

6. Rule 23 (a), (b), and (c), Federal Rules of

Civil Procedure:

“CLASS ACTIONS

(a) Prerequisites to a Class Action. One or

more members of a class may sue or be sued as

representative parties on behalf of all only if (1)

the class is so numerous that joinder of all mem-

bers is impracticable, (2) there are questions of

law or fact common to the class, (3) the claims

or defenses of the representative parties are typical

of the claims or defenses of the class, and (4)

the representative parties will fairly and adequately

protect the interests of the class.

(b) Class Actions Maintainable. An action may

be maintained as a class action if the prerequisites

of subdivision (a) are satisfied, and in addition:

(1) the prosecution of separate actions by or

against individual members of the class would

create a risk of

(A) inconsistent or varying adjudications with

respect to individual members of the class which

would establish incompatible standards of conduct

for the party opposing the class, or

(B) adjudications with respect to individual

members of the class which would as a practical

matter be dispositive of the interests of the other

members not parties to the adjudications or sub-

stantially impair or impede their ability to protect

their interests; or

(2) the party opposing the class has acted or

refused to act on grounds generally applicable to

the class, thereby making appropriate final in-

junctive relief or corresponding declaratory relief

with respect to the class as a whole; or

(3) the court finds that the questions of law or

fact common to the members of the class predomi-

nate over any questions affecting only individual

members, and that a class action is superior to

other available methods for the fair and efficient

adjudication of the controversy. The matters perti-

nent to the findings include: (A) the interest of

members of the class in individually controlling

the prosecution or defense of separate actions; (B)

the extent and nature of any litigation concerning

the controversy already commenced by or against

members of the class; (C) the desirability or un-

desirability of concentrating the litigation of the

claims in the particular forum; (D) the difficulties

likely to be encountered in the management of a

class action.

tion to be Maintained; Notice; Judgment; Actions

Conducted Partially as Class Actions.

(1) As soon as practicable after the commence-

ment of an action brought as a class action, the

court shalledetermine by order whether it is to be

so maintaihed. An order under this subdivision

may be conditional, and may be altered or amended

before the decision on the merits.

(2) In any class action maintained under sub-

division (b) (3), the court shall direct to the

members of the class the best notice practicable

under the circumstances, ‘including individual no-

tice to all members who can be identified through

reasonable effort. The notice shall advise each

— ;

member that (A) the court will exclude him from

the class if he so requests by a specified date;

(B) the judgment, whether favorable or not, will

include all members who do not request exclusion;

and (C) any member who does not request ex-

clusion may, if he desires, enter an appearance

through his counsel.

(3) The judgment in an action maintained as

a class action under subdivision (b) (1) or (b)

(2), whether or not favorable to the class, shall

include and describe those whom the court finds

to be members of the class. The judgment in an

action maintained as a class action under subdi-

vision (b) (3), whether or not favorable to the

class, shall include and specify or describe those

to whom the notice provided in subdivision (c)

(2) was directed, and who have not requested

exclusion, and whom the court finds to be members

of the class.

(4) When appropriate (A) an action may be

brought or maintained as a class action with re-

spect to particular issues, or (B) a class may be

divided into subclasses and each subclass treated

as a class, and the provisions of this rule shall

then be construed and applied accordingly.”

Rule 24(b), Federal Rules of Civil Procedure:

“(b) Permissive Intervention. Upon timely appli-

cation anyone may be permitted to intervene in an

action: (1) when a statute of the United States

confers a conditional right to intervene; or (2)

when an applicant’s claim or defense and the

main action have a question of law or fact in

common. When a party to an action relies for

| won

ground of claim or defense upon any statute or

executive order administered by a federal or state

governmental officer or agency or upon any regu-

lation, order, requirement or agreement issued or

made pursuant to the statute or executive order,

the officer or agency upon timely application may

be permitted to intervene in the action. In exer-

cising its discretion the court shall consider whether

the intervention will unduly delay or prejudice the

adjudication of the rights of the original parties.”

a, ae

Indictment.

United States District Court, Southern District of

California, Central Division.

United States of America vs. American Pipe and

Construction Co.; United Concrete Pipe Corp.; Lloyd

R. Earl; Robert V. Edwards; and Richard I. Young.

Criminal No. 33338.

The Grand Jury charges:

DEFINITIONS

1. As used herein, the term:

a. “Concrete pipe” means pipe constructed of

concrete either with or without metal components

as herein defined, to convey water or sewage, and

includes both pressure and nonpressure pipe;

b. “Metal components” refers to steel sheets,

skelp, rods, wire and mesh used in the manufac-

ture of concrete pipe;

c. “Western Area” refers to California, Ore-

gon, Washington, Arizona, New Mexico, Utah,

Wyoming, Nevada, Idaho and Hawaii; and

d. “End users” means customers who purchase

and install or have installed concrete pipe to trans-

port drinking water and for sanitation, drainage,

irrigation, flood control and similar purposes.

THE DEFENDANTS

2. American Pipe and Construction Co. (referred

to herein as American) is-hereby indicted and made

—12—

a defendant herein. Said defendant is a corporation

existing under the laws of the State of California with

its principal place of business in Monterey Park, Cali-

fornia. During the period of time covered by this in-

dictment, said defendant owned a substantial majority

of the shares of American Concrete Pipe Co., an Ari-

zona corporation, and controlled said corporation, here-

inafter named a co-conspirator. Said defendant and

said co-conspirator engaged, among other things, in the

business of manufacturing and of selling concrete pipe.

3. United Concrete Pipe Corp. (referred to herein-

after as United) is hereby indicted and made a de-

fendant herein. Said defendant is a corporation organ-

ized and existing under the laws of the State of Cali-

fornia with its principal place of business in Baldwin

Park, California. During the period of time covered

by this indictment, said defendant engaged in the busi-

ness of manufacturing and selling concrete pipe to cus-

tomers, including customers within the Western Area.

4. Each of the individuals listed below is hereby

indicted and made a defendant herein. During the pe-

riod of time covered by this indictment, each said in-

dividual defendant occupied the position with the de-

fendant corporation indicated below:

Defendant

Name Position Company.

Lloyd R. Eari United

Robert V. Edwards American

Richard I. Young United

<j.

CO-CONSPIRATORS

5. American Concrete Pipe Co., and various other

companies and individuals not made defendants in this

indictment, participated as co-conspirators in the of-

fense charged herein and performed acts and made

statements in furtherance thereof.

NATURE OF TRADE AND COMMERCE

6. Concrete pipe is used in the construction of

systems to convey water and sewage and is used pri-

marily for the conveyance of drinking water and for

sanitation, irrigation, drainage, flood control and similar

purposes.

7. The construction of systems utilizing concrete

pipe is customarily contracted for by the end user with

general contractors on the basis of competitive bids.

Prior to submitting such bids, the general contractors

usually solicit quotations from pipe manufacturers for

the purchase price of the pipe delivered to the site

where the pipe is to be installed. The award winning

contractor usually contracts for the purchase of the pipe

from the low quoting pipe manufacturer at the price

quoted by the latter. Occasionally the end user contracts

directly with a pipe manufacturer for the purchase of

concrete pipe and usually on the basis of competitive

bidding.

8. The corporate defendants are the principal man-

ufacturers of concrete pipe in the Western Area and

—[4—

during the period 1958 through 1961 their average

annual sales of concrete pipe in the Western Area were

at least $41,500,000. Because of the relatively limited

number of manufacturers of concrete pipe, general con-

tractors and end users frequently solicit bids for said

pipe from manufacturers outside the State where said

pipe is to be installed. Manufacturers of said pipe

usually manufacture the pipe for a particular job only

after receiving an order for it. Said manufacturers cus- .

tomarily identify each section of pipe so as to desig-

nate its position in the pipe line and deliver or have

delivered said pipe direct to the trench side or as near

as possible to the place where it will be installed. Dur-

ing the period of time covered by this indictment, the

defendants herein have manufactured substantial quan-

tities of concrete pipe at their plants within the West-

ern Area, and have sold, shipped, and delivered said

pipe to job sites outside the State where it was manu-

factured. Thus said concrete pipe moves in a continuous

and uninterrupted flow from the place of manufac-

ture, including the plants of defendants herein, to points

of installation outside the State where said pipe was

manufactured.

9. Most concrete pipe is reinforced with metal com-

ponents as it is manufactured both to strengthen the

pipe and particularly with respect to concrete pressure

pipe, to make it watertight. The defendant manufac-

turers purchase said metal cémponents in anticipation

of orders for concrete pipe or to enable them to fill

existing orders for concrete pipe. Substantial quantities

a —15—

of the metal components which the defendants use in

manufacturing concrete pipe within the Western Area

are produced outside the State where said pipe is man-

ufactured. The movement in interstate commerce of

the metal components is necessary to the manufacture

and sale of concrete pipe by the defendants in the

Western Area and the defendants and co-conspirators

are conduits through which said metal components flow

in a continuous uninterrupted stream in interstate com-

merce from the place where said components are pro-

duced to the place within the Western Area where the

components are incorporated into concrete pipe and

on to the final site where said pipe is installed.

10. Any restraint upon free competition in the pro-

duction or sale of concrete pipe in the Western Area

necessarily and directly restrains and affects the inter-

state flow of concrete pipe and the interstate flow of

the metal components used in the construction of said

Pipe.

OFFENSE CHARGED

11. Beginning in or prior to the year 1954, and

continuing thereafter until at least August 1962, the

exact dates being to the grand jurors unknown, the de-

fendants and co-conspirators engaged in an unlawful

combination and conspiracy in restraint of the herein-

before described interstate trade and commerce in vio-

lation of Section 1 of the Act of Congress of July 2,

1890, as amended, 15 U.S.C. Section 1, commonly

known as the Sherman Act.

insite

12. The aforesaid combination and conspiracy con-

sisted of a continuing agreement, understanding, and

concert of action among the defendants and co-con-

spirators, the substantial terms of which were:

a. To submit collusive and rigged bids for the

sale of concrete pipe;

b. To allocate and divide orders for the pur-

chase of concrete pipe among themselves.

13. For the purpose of forming and effectuating the

aforesaid combination and conspiracy, the defendants

and co-conspirators did those things which, as herein-

before alleged, they combined and conspired to do, in-

cluding, among others, the following things:

a. Defendants and co-conspirators held pe-

riodic meetings to tally past orders and to discuss

prospective orders for the purpose of allocating

prospective orders among said defendants and

co-conspirators according to pre-agreed percen-

tages; and

b. At such meetings and in subsequent tele-

phone conversations defendants and co-conspirators

agreed between and among themselves as to which

manufacturer would make the low bid and which

manufacturers would submit higher complemen-

tary bids not intended to win awards on such

jobs. Jobs for the following end users, among

others, were thus allocated among the corporate

defendants:

Metropolitan Water District of Southern Cali-

fornia; East Bay Municipal Utility District, Oak-

land, California; San Diego County Water Authori-

ty; Los Angeles County Flood Control District;

Calleguas Municipal Water District; City of San

=|, =

Diego; Orange County Sanitation District; Cali-

fornia Division of Highways; Los Angeles Depart-

ment of Water and Power; City of Phoenix, Ari-

zona; City of Everett, Washington; California De-

partment of. Water Resources; Contra Costa San-

itary District, California; United States Bureau of

Reclamation, Placerville and San Joaquin, Cali-

fornia; United States Corps of Engineers, Walla

Walla, Washington; Sonoma County Flood Con-

trol and Water Conservation District; El Toro Wa-

ter District and The Los Alisos Water District,

Orange County, California; Humboldt Bay Mu-

nicipal Water District, California; City of Aber-

deen, Washington; Santiago Aqueduct Commis-

sion, Santa Ana, California.

EFFECTS OF THE CONSPIRACY

14. The aforesaid combination and conspiracy

had, among others, the following effects:

a. Competition between and among the de-

fendants and co-conspirators was restricted and

suppressed;

b. General contractors and other awarding

authorities were deprived of the right to receive

competitive bids and quotations for concrete pipe

and were deceived into believing collusive and non-

competitive bids and quotations were competitive;

and

c. The cost of concrete pipe in the Western

Area was arbitrarily increased.

—18—

vil

JURISDICTION AND VENUE

15. The aforesaid combination and conspiracy was

formed and carried out, in part, within the Southern

District of California, Central Division, and within

the jurisdiction of this Court, within five years preceding

the return of this indictment.

Dated:

A TRUE BILL

Foreman

BARBARA J. SVEDBERG

Attorney, Department of Justice

DONALD J. FALLON

Attorney, Department of Justice

/s/ William H. Orrick, Jr.

WILLIAM H. ORRICK, JR.

Assistant Attorney General

/s/ Harry G. Sklarsky

HARRY G. SKLARSKY

Attorney, Department of Justice

STANLEY E. DISNEY

Attorney, Department of Justice

FRANCIS C. WHELAN

United States Attorney

Filed March 10, 1964.

[Endorsement omitted in printing |

Indictment.

United States District Court, Southern District of

California, Central Division.

United States of America, vs. Kaiser Steel Corpora-

tion; United States Steel Corporation; P. M. Cobb; and

Ernest L. Ilsley. Criminal No. 33339.

The Grand Jury charges:

DEFINITIONS

1. As used herein, the term:

(a) “Steel large diameter pressure pipe,” referred to

herein as steel LDP pipe, means heavy walled welded

steel pipe which is manufactured in diameters of over

24 inches and sold for the conveyance of water or

sewage under internal pressures exceeding 115 feet

of head or 50 pounds per square inch;

(b) “Western Area” refers to California, Oregon,

Washington, Arizona, New Mexico, Utah, Wyoming,

Nevada, Idaho, and Hawaii;

install or have installed steel LDP pipe in systems pri-

marily for the conveyance of water or sewage under

pressure.

THE DEFENDANTS

2. Kaiser Steel Corporation (referred to herein as

Kaiser) is hereby indicted and made a defendant

herein. Said defendant is a Nevada corporation with

its principal offices in Oakland, California. During the

period of time covered by this indictment, said defend-

ant engaged, among other things, in the production

—20—

and sale of steel LDP pipe to customers within the

Western area.

-3. United States Steel Corporation (referred to

herein as U.S. Steel) is hereby indicted and made a

defendant herein. Said defendant is a New Jersey cor-

poration which in 1948 acquired the Consolidated

Western Steel Corporaton, and which, during the period

of the conspiracy, it operated as a division of U.S.

Steel, with its principal offices in Commerce, Califor-

nia. During the period of time covered by this indict-

ment, said defendant manufactured and sold steel

LDP pipe at plants within the Western area a sub-

stantial majority of which it sold to customers within

said area.

4. Each of the individuals listed below is hereby

indicted and made a defendant herein. During the

period of time covered by this indictment each said

defendant occupied the position with the defendant cor-

poration indicated below:

Defendant

Name Position Company

P. M. Cobb Vice President, Sales, US. Steel

Consolidated Western Division

Ernest L. Iisley Vice President and General Manager, Kaiser

Napa-Fontana Fabricating Division

Ill

CO-CONSPIRATORS

5. Southwest Welding and Manufacturing Compa-

ny and certain officers and employees of Southwest

and of the corporate defendants participated as co-

conspirators with the defendants in the offense alleged

herein and performed acts and made statements in

furtherance thereof. .

NATURE OF TRADE AND COMMERCE

6. Steel LDP pipe is used for the conveyance of

drinking water under pressure and for irrigation and

sanitation systems. The construction of systems utilizing

steel LDP pipe is customarily contracted for by the

end user with general contractors on the basis of com-

petitive bids. Prior to submitting such bids, the general

contractors usually solicit quotations from pipe manu-

facturers or other suppliers for the purchase price of the

pipe delivered to the site where the pipe is to be in-

_ Stalled. The award winning contractor usually con-

tracts for the purchase of the pipe from the low quot-

ing pipe manufacturer or supplier at the price quoted.

Occasionally the end user contracts directly with a

pipe manufacturer or other supplier for the purchase of

steel LDP pipe and usually on the basis of competitive

bidding.

7. The corporate defendants are the principal

manufacturers of steel LDP pipe in the Western area.

Total sales of steel LDP pipe in the Western area

during the period 1958 through 1961 by the corporate

defendants averaged at least $7,000,000 annually. Be-

cause of the relatively limited number of manufacturers

of steel LDP pipe, general contractors and end users

frequently solicit bids for said pipe from manufacturers

outside the State where said pipe is to be installed.

Manufacturers of said pipe usually manufacture the

pipe for a particular job only after receiving an order

for it. Said manufacturers customarily identify each

section of pipe so as to designate its position in the

pipe line and deliver or have delivered said pipe direct

to the trench site or as near as possible to the place

wield cies

where it will be installed. During the period of time

covered by this indictment, the defendants herein have

manufactured substantial quantities of steel LDP pipe

at their plants within the Western area, and have sold,

shipped, and delivered said pipe to job sites outside

the State where it was manufactured. Thus said steel

LDP pipe moves in a continuous and uninterrupted

flow from the place of manufacture, including the plants

of defendants herein, to points of installation outside

the State where said pipe was manufactured.

8. Steel LDP pipe is fabricated largely from steel

plate. The defendant manufacturers purchase or pro-

duce said steel plate in anticipation of orders for steel

LDP pipe or to enable them to fill existing orders for

steel LDP pipe. Substantial quantities of the steel plate

which the defendants use in manufacturing steel LDP

pipe within the Western area are produced outside the

State where said pipe is manufactured. The movement

in interstate commerce of the steel plate is necessary to

the manufacture and sale of steel LDP pipe by the

defendants in the Western area and the defendants and

co-conspirators are conduits through which said steel

plate flows in a continuous uninterrupted stream in

interstate commerce from the place where said plate

is produced to the place within the Western area where

the plate is fabricated into steel LDP pipe and on to

the final site where said pipe is installed.

9. Any restraint upon freé competition in the pro-

duction or sale of steel LDP pipe in the Western area

necessarily and directly restrains and affects the inter-

state flow of steel LDP pipe and the interstate flow

of the steel plate used in the fabrication of said pipe.

OFFENSE CHARGED

10. Beginning sometime prior to 1955, and con-

tinuing thereafter until at least August 1962, the ex-

act dates being to the grand jurors unknown, the de-

fendants and co-conspirators engaged in an unlawful

combination and conspiracy in restraint of the herein-

before described interstate trade and commerce in viola-

tion of Section 1 of the Act of Congress of July 2,

1890, as amended, 15 U.S.C. Section 1, commonly

known as the Sherman Act.

11. The aforesaid combination and conspiracy con-

sisted of a continuing agreement, understanding, and

concert of action among the defendants and co-con-

spirators, the substantial terms of which were:

(a) To submit collusive and rigged bids for

the sale of steel LDP pipe;

(b) To allocate and divide orders for the pur-

chase of steel LDP pipe among themselves,

12.. For the purpose of forming and effectuating

the aforesaid combination and conspiracy, the defend-

ants and co-conspirators did those things which, as

hereinbefore alleged, they combined and conspired to

do, including, among others, the following things:

(a) Defendants and co-conspirators held pe-

riodic meetings to tally past orders and to discuss

prospective orders for the purpose of allocating

prospective orders among said defendants and co-

conspirators according to pre-agreed percentages;

and

(b) At such meetings and in subsequent tele-

phone conversations defendants and co-conspira-

tors agreed between and among themselves as to

which manufacturer would make the low bid and

which manufacturers would submit higher com-

plementary bids not:intended to win awards on

such jobs. Jobs for the following end users, among

others, were thus allocated among the defendants:

Metropolitan Water District of Southern Califor-

nia; East Bay Municipal Utility District, Oakland,

California; San Diego County Water Authority,

California; Calleguas Municipal Water District,

California; City of San Diego, California; Los An-

geles Department of Water and Power, California;

El Toro Water and The Los Alisos Water Dis-

trict, Orange County, California; Santiago Aque-

duct Commission, Santa Ana, California.

EFFECTS OF THE CONSPIRACY

13. The aforesaid combination and conspiracy had,

among others, the following effects:

(a) Competition between and among the de

fendants and co-conspirators was restricted and

suppressed;

(b) General contractors and end users were

deprived of the right to receive competitive bids

and quotations for steel LDP pipe and were de-

ceived into believing colhusive and noncompetitive

bids and quotations were competitive; and

area was arbitrarily increased.

—25—

Vil

JURISDICTION AND VENUE

14. The aforesaid combination and conspiracy was

formed and carried out, in part, within the Southern

District of California, Central Division, and within the

jursdiction of this Court, within five years preceding

the return of this indictment.

Dated:

A TRUE BILL

Foreman

BARBARA J. SVEDBERG

Attorney, Department of Justice

DONALD J. FALLON

Attorney, Department of Justice

/s/ WILLIAM H. ORRICK, JR.

William H. Orrick, Jr.

Assistant Attorney General

/s/ HARRY G. SKLARSKY

Harry G. Sklarsky

Attorney, Department of Justice

STANLEY E. DISNEY

Attorney, Department of Justice

FRANCIS C. WHELAN

United States Attorney

Filed March 10, 1964.

[Endorsement omitted in printing]

— a

Indictment.

United States District Court, Southern District of

California, Central Division.

United States of America, vs. United Concrete Pipe

Corp.; American Pipe and Construction Co.; Kaiser

Steel Corporation; United States Steel Corporation;

P. M. Cobb; Lloyd R. Earl; Robert V. Edwards; Ern-

est L. Ilsley; and Richard I. Young. Criminal No.

33340.

The Grand Jury charges:

DEFINITIONS

As used herein, the term:

(a) ‘Steel large diameter pressure pipe”, (re-

ferred to herein as steel LDP pipe), means heavy-

walled welded steel pipe, manufactured from steel

plate, in diameters over 24 inches and sold for the

conveyance of water and sewage under internal

pressures exceeding 115 feet of head or 50 pounds

per square inch;

(b) “Concrete large diameter pressure pipe”,

(referred to herein as concrete LDP pipe) means

concrete pressure pipe, which ordinarily utilizes

steel sheets or skelp in its manufacture, in diame-

ters over 24 inches, sold for the conveyance of

water and sewage under internal pressures exceed-

ing 115 feet of head or 50 pounds per square

inch;

which is manufactured and sold, or offered for

sale in jobs where the specifications permit the use

of either concrete LDP pipe or steel LDP pipe;

— -

(d) inci Components” refers to steel plate,

sheets, skelp, rods, wires and mesh used in the

production of alternate LDP pipe;

(e) “Western area” refers to California, Ore-

gon, Washington, Arizona, New Mexico, Utah,

Wyoming, Nevada, Idaho and Hawaii;

(f) “End users” means customers who purchase

and install or have installed alternate LDP pipe

in systems primarily for the conveyance of water

or sewage under pressure.

DEFENDANTS

2. American Pipe and Construction Co. (referred

to herein as American) is hereby indicted and made a

defendant herein. Said defendant is a corporation ex-

isting under the laws of the State of California with its

principal place of business in Monterey Park, Califor-

nia. During the period of time covered by this indict-

ment said defendant owned a substantial majority of

the shares of American Concrete Pipe Co., an Arizona

corporation, and controlled said corporation, hereinafter

named a co-conspirator. Said defendant and said co-

conspirator engaged, among other things, in the busi-

ness of manufacturing and of selling concrete LDP pipe

including alternate LDP pipe to customers located in

the Western area. ’

3. Kaiser Steel Corporation (referred to herein as

Kaiser) is hereby indicted and made a defendant here-

in. Said defendant is a Nevada corporation with its

principal offices in Oakland, California. During the pe-

riod of time covered by this indictment, said defend- —

ant engaged, among other things, in the production and

sale of steel LDP pipe including alternate LDP pipe to _

customers within the Western area.

4. United Concrete Pipe Corp. (referred to herein

as United) is hereby indicted and made a defendant

herein. Said defendant is a corporation organized and

existing under the laws of the State of California with

its principal place of business in Baldwin Park, Cali-

fornia. During the period of time covered by this in-

dictment, said defendant engaged in the business of

manufacturing and selling concrete LDP pipe including

alternate LDP pipe to customers within the Western

defendant herein. Said defendar

poration which in 1948 acquired the Conso idated

Western Steel Corporation, which, during the period of

the conspiracy, it operated as a division of U.S. Steel

with its principal offices in Commerce, California. Dur-

ing the period of time covered by this indictment, said

defendant manufactured and sold steel LDP pipe, in-

cluding alternate LDP pipe, at plants within the West-

ern area, a substantial majority of which it sold to cus-

tomers within said area.

6. Each of the individuals listed below is hereby in-'

dicted and made a defendant herein. During the period

of time covered by this indictment each said defend-

ant occupied the position with the defendant corpora-

tion indicated below:

Defendant

Name Position Company

P. M. Cobb Vice President, USS. Steel

Sales, Consolidated

Western Division

Lloyd R. Earl President United

Robert V. Edwards President American

Ernest L. Ilsley Vice President and Kaiser

General Manager

Napa-Fontana Fabricating

Division

Richard I. Young _ Vice President, Sales United

Ill

CO-CONSPIRATORS

7. Southwest Welding and Manufacturing Compa-

fap.Concrete Pipe Co., of Phoenix, Ari-

NATURE OF TRADE AND COMMERCE

8. The corporate defendants are the principal man-

ufacturers of alternate LDP pipe in the Western area.

Total sales of alternate LDP pipe in the Western area

by the corporate defendants during the period 1958

through 1961 averaged at least $15,000,000 annually.

Said pipe is used primarily for the conveyance of drink-

‘ing water, but is also utilized in systems for the trans-

portation of sewage and of irrigation water.

—30—

9. The construction of systems utilizing alternate

LDP pipe is customarily contracted for by the end user

with general contractors on the basis of competitive

bids. Customarily the end users draft or have drafted the

specifications where this is appropriate, so that either

concrete LDP pipe or steel LDP pipe can be used in

the system. Prior to submitting bids to the end user,

the general contractor usually solicits quotations from

pipe manufacturers for the purchase price of the pipe

delivered to the site where it is to be installed. The

award winning contractor usually contracts for the pur-

chase of the pipe from the low quoting pipe manu-

facturer at the price quoted by the latter. Occasionally

the end user contracts directly with the pipe manufac-

turer for the purchase of said pipe and usually on the

basis of competitive bidding.

10. The specifications for alternate LDP pipe re

quire that the pipe be lined and/or coated with .con-

crete. When the steel LDP pipe manufacturers plan to

submit bids er quotations on an alternate LDP pipe

job, they, in turn, solicit quotations or bids from the

concrete LDP pipe manufacturers for the performance

of this service. The cost of this service is then incor-

porated in the quotation or bid submitted to the gen-

eral contractors or end users by the steel LDP pipe

manufacturer.

11. Because of the relatively limited number of

manufacturers of alternate LDP pipe, general contrac-

tors and end users, where the specifications permit the

use of alternate LDP pipe, customarily solicit bids and

quotations both from manufacturers of concrete LDP

pipe and from manufacturers of steel LDP pipe, and

frequently they solicit bids from said manufacturers

outside the State where said pipe is to be installed.

Manufacturers of alternate LDP pipe usually manufac-

ture the pipe for a particular job only after receiving

an order for it. Said manufacturers customarily identify

each section of pipe so as to designate its position

in the pipe line and deliver, or have delivered, said

pipe direct to the trench side or as near as possible to

the place where it is to be installed. During the period

of time covered by this indictment, the defendants here-

in have manufactured substantial quantities of alter-

nate LDP pipe at their plants within the Western area,

and in response to solicitations calling for bids on al-

ternate LDP pipe, have shipped and delivered said pipe

to job sites outside the State where it was manufac-

tured. Thus said alternate LDP pipe moves in a contin-

uous and uninterrupted flow from the place of man-

ufacture, including the plants of the defendants here-

in, to points of installation outside the State where

said pipe was manufactured.

12. Substantial amounts of metal components are

used in the manufacture of alternate LDP pipe. The

defendant manufacturers of alternate LDP pipe often

obtain said metal components in anticipation of orders

for said pipe or to enable them to fill existing orders

for said pipe. Substantial quantities of said metal com-

ponents, used in the manufacture of alternate LDP pipe

within the Western area, are produced outside the

State where said pipe is manufactured.

— =

13. The movement in interstate commerce of met-

al components used in alternate LDP pipe is neces-

sary to the manufacture and sale of alternate LDP pipe

by the defendants in the Western area and the defend-

ants and co-conspirators are conduits through which

said metal components flow in a continuous, uninter-

Nea ge

where produced to the place within the Western area

where said metal components are incorporated into al-

ternate LDP pipe and on to the final site where said

pipe is installed. Any restraint upon free competition

in the production or sale of alternate LDP pipe in the

Western area necessarily and directly restrains and af-

fects the interstate flow of alternate LDP pipe and

the interstate flow of said metal components used in

the manufacture of alternate LDP pipe.

OFFENSE CHARGED

14. Beginning sometime prior to 1955, and con-

tinuing thereafter until at least August 1962, the exact

dates being to the grand jurors unknown, the defend-

ants and co-conspirators engaged in an unlawful

combination and conspiracy in restraint of the herein-

before described interstate trade and commerce in/vio-

lation of Section 1 of the Act of Congress of Jily 2,

1890, as amended, 15 U.S.C. Section 1, commonly

known as the Sherman Act. ;

15. The aforesaid combination and conspiracy con-

sisted of a continuing agreement, understanding and

concert of action among the defendants and co-con-

spirators to allocate and divide solicitations for alter-

nate LDP pipe so that the manufacturers of steel LDP

pipe would obtain approximately fifty per cent of the

orders resulting from said solicitations, and the manu-

facturers of concrete LDP Pipe would obtain approxi-

mately fifty per cent of the orders resulting from said

solicitations, the amount of business involved in the

lining and coating of the steel LDP pipe by the con-

crete LDP pipe manufacturers being included in the

share to be obtained by the concrete LDP pipe manu-

facturers.

16. For the purpose of forming and effectuating

the aforesaid combination and conspiracy, the defend-

ants and co-conspirators did those things which, as

hereinbefore alleged, they combined and conspired to

do, including among others, the following things:

(a) Tallies were maintained by representatives

of each corporate defendant for the purpose of

keeping a record of whether a steel LDP pipe

manufacturer or a concrete LDP pipe manufacturer

obtained each job. Information needed for such

tallies was often obtained at meetings or by tele-

Phone conversations between the defendants or

co-conspirators.

(b) Jobs for the following end users, among

others, were allocated to the steel LDP pipe group

or the concrete LDP pipe group of manufacturers

at meetings or by telephone conversations between

the defendants and co-conspirators: Metropolitan

Water District of Southern California; East Bay

Municipal Utility District, Oakland, California;

San Diego County Water Authority; Calleguas

Municipal Water District; City of San Diego; Los

Angeles Department of Water and Power; City

of Phoenix, Arizona; El Toro Water District and

The Los Alisos Water District, Orange County,

California; Humboldt Bay Municipal Water Dis-

trict, California; Santiago Aqueduct Commission,

Santa Ana, California.

EFFECTS OF THE CONSPIRACY

17. The aforesaid combination and conspiracy had,

among others, the following effects:

(a) Competition between and among the de.

fendants and co-conspirators was restricted and

suppressed;

(b) General contractors and other awarding

authorities were deprived of the right to receive

competitive bids and quotations for alternate LDF

pipe and were deceived into believing collusive anc

noncompetitive bids and quotations were competi

tive; and

Western area was arbitrarily increased.

vil

JURISDICTION AND VENUE

18. The aforesaid combigation and conspiracy wa

formed and carried out, in part, within the Southen

District of California, Central Division, and within th

— =

jurisdiction of this Court, within five years preceding

the return of this indictment.

Dated:

A TRUE BILL

Foreman

BARBARA J. SVEDBERG

Attorney, Department of Justice

DONALD J. FALLON

Attorney, Department of Justice

/s/ William H. Orrick, Jr.

WILLIAM H. ORRICK, JR.

Assistant Attorney General

/s/ Harry G. Sklarsky

HARRY G. SKLARSKY

Attorney, Department of Justice

STANLEY E. DISNEY

Attorney, Department of Justice

FRANCIS C. WHELAN

United States Attorney

Filed March 10, 1964.

[Endorsement omitted in printing]

Indictment.

United States District Court, Southern District of

California, Central Division.

United States of America, vs. United States Indus-

tries, Inc.; American Pipe and Construction Co.; Smith-

Scott, Inc.; United Concrete Pipe Corp.; United States

Steel Corporation; D. N. Chamberlain; Robert V. Ed-

wards; D. A. Stromsoe; and Richard I. Young. Crim-

inal No. 33341.

The Grand Jury charges:

DEFINITIONS

As used herein, the term:

(a) “Steel small diameter pressure pipe”, re

ferred to herein as steel SDP pipe, means thir

walled welded steel pipe, manufactured from stee

plate in diameters of 12 inches to 48 inches anc

sold for the conveyance of water and sewage unde!

internal pressures exceeding 115 feet of head o1

50 pounds per square inch;

(b) “Concrete small diameter pressure pipe”

referred to herein as concrete SDP pipe, mean:

concrete cylinder pipe, which utilizes steel sheet

or skelp in its manufacture, in diameters from 1:

inches to 48 inches and sold for the conveyance

of water or sewage under internal pressure exceed

ing 115 feet of head or 50 pounds per squar

inch. P

which is manufactured and sold, or offered fo

a |

sale in jobs where the specifications permit the

use of either concrete SDP pipe or steel SDP pipe;

(d) “Metal components” refers to steel plate,

sheets, skelp, rods, wires and mesh used in the

production of alternate SDP pipe;

(¢) “Western area” refers to California, Ore-

gon, Washington, Arizona, New Mexico, Utah,

Wyoming, Nevada, Idaho and Hawaii;

(f) “End users” means customers who purchase

and install or have installed alternate SDP pipe.

DEFENDANTS

2.. American Pipe and Construction Co. (referred

to herein as American) is hereby indicted and made a

defendant herein. Said defendant is a Corporation exist-

ing under the laws of the State of California with its

principal place of business in Monterey Park, Califor-

nia. During the period of time covered by this indict-

ment said defendant owned a substantial majority of

the shares of American Concrete Pipe Co., an Arizona

corporation, and controlled said corporation, herein-

after named a co-conspirator. Said defendant and said

co-conspirator engaged, among other things, in the

business of manufacturing and of selling concrete SDP

pipe.

3. Smith-Scott, Inc. (referred to herein as Smith-

Scott) is hereby indicted and made a defendant here-

in. Said defendant is a corporation existing under the

laws of the State of California with its principal place

— o

of business at 6501 Clay Street, Riverside, California.

During the period of time covered by this indictment,

said defendant engaged in the business of manufacturing

and selling and offering for sale Steel SDP pipe.

4. United Concrete Pipe Corp. (referred to herein

as United) is hereby indicted and made a defendant

herein. Said defendant is a corporation organized

and existing under the laws of the State of California

with its principal place of business in. Baldwin Park,

California. During the period of time covered by this

indictment; said defendant engaged in the business of

manufacturing and selling concrete SDP pipe to custo-

mers within the Western area.

5. United States Industries, Inc. (referred to here-

in as USI) is hereby indicted and made a defendant

herein. Said defendant is a Delaware corporation which

in 1955 purchased the assets of Southern Pipe & Cas-

ing Company, consisting of, among other things, a

plant for manufacturing steel SDP pipe which, during

the period covered by this indictment, it operated as

the Tubular Products Division of USI with headquarters

in Azusa, California. Said defendant, during this period,

also operated a plant manufacturing steel SDP pipe

in Hawaii.

6. United States Steel Corporation (referred to

herein as U.S. Steel) is hereby indicted and made a

defendant herein. Said defendant is a New Jersey cor-

poration which in 1948 acquired the Consolidated

Western Steel Corporation, which during the period of

the conspiracy, it operated as a division of U.S. Steel.

Said defendant manufactures steel SDP pipe at a plant

in Linden, Utah, which is sold directly or through

distributors to customers in the Western area.

iter

7. Each of the individuals listed below is hereby

indicted and made a defendant herein. During the

period of time covered by this indictment each. said

defendant occupied the position with the defendant

corporation indicated below:

Defendant

Name Position Company

D. N. Chamberlain Executive Vice President USI

Tubular Division

Robert V. Edwards President American

D. A. Stromsoe President USI

Tubular Division

Richard I. Young _ Vice President United

Sales

CO-CONSPIRATORS

8. American Concrete Pipe Co., of Phoenix, Ari-

zona, and various other companies and individuals not

made defendants in this indictment, participated as

co-conspirators in the offense charged herein and per-

formed acts and made statements in furtherance thereof.

, IV

NATURE OF TRADE AND COMMERCE

9. The corporate defendants are the principal manu-

facturers of alternate SDP pipe in the Western area.

During the period 1957 through 1961, their average

annual sales of alternate SDP pipe in the Western area

were approximately $18,000,000. Said pipe is used for

the conveyance of drinking water under pressure and

for irrigation and sanitation systems.

10. The construction of systems utilizing alternate

SDP pipe is customarily contracted for by the end user

with general contractors on the basis of competitive

bids. Customarily the end users draft or have drafted

the specifications where this is appropriate, so that

either concrete SDP pipe or steel SDP pipe can be used

in the system. Prior to submitting bids to the end user,

the general contractor usually solicits quotations from

pipe manufacturers for the purchase price of the pipe

delivered to the site where it is to be installed. The

award winning contractor usually contracts for the pur-

chase of the pipe from the low quoting pipe manu-

facturer at the price quoted by the latter. Occasionally

the end user contracts directly with the pipe manufactur-

ers for the purchase of alternate SDP pipe and usually

on the basis of competitive bidding.

11. Because of the relatively limited number of

manufacturers of alternate SDP pipe, general con-

tractors and end users, where the specifications permit

the use of alternate SDP pipe, customarily solicit bids

both from manufacturers of concrete SDP pipe and

from manufacturers of steel SDP pipe, and frequently

they solicit bids from said manufacturers outside the

State where said pipe is to be installed. Manufacturers

of alternate SDP pipe usually manufacture the pipe for

a particular job only after receiving an order for it. Said

manufacturers customarily identify each section of

pipe so as to designate its position in the pipe line and

deliver, or have delivered, said pipe direct to the

trench side or as near as possible to the place where

it is to be installed. During the period of time covered

by this indictment, the defendants herein have manu-

factured substantial quantities of alternate SDP pipe at

their plants within the Western area, and in response

to solicitations calling for bids on alternate SDP pipe,

have shipped and delivered said pipe to job sites out-

side the State where it was manufactured. Thus said

er ee

alternate SDP\ pipe moves in a continuous and unin-

terrupted flow from the place of manufacture, includ-

ing the plants of the defendants herein, to points of

installation outside the State where said pipe was

manufactured.

12. Substantial amounts of metal components are

used in the manufacture of alternate SDP pipe. The

defendant manufacturers of alternate SDP pipe often

obtain metal components in anticipation of orders for

said pipe or to enable them to fill existing orders, Sub-

stantial quantities of metal components used in the

manufacture of alternate SDP pipe within the Western

area are produced outside the State where said pipe

is manufactured.

13. The movement in interstate commerce of metal

components used in alternate SDP pipe is necessary

to the manufacture and sale of alternate SDP pipe by

the defendants in the Western area and the defendants

and co-conspirators are conduits through which said

metal components flow in a continuous, uninterrupted

stream in interstate commerce from the place where

produced to the place within the Western area where

said metal components are incorporated into alternate

SDP pipe and on to the final site where said Pipe is

installed. Any restraint upon free competition in the

production or sale of alternate SDP pipe in the Western

area necessarily and directly restrains and affects ‘the

interstate flow of alternate SDP pipe and the interstate

flow of said metal components used in the manufacture

of alternate SDP pipe.

OFFENSE CHARGED

14. Beginning sometime prior to 1955, and con-

tinuing thereafter until at least January 1962, the exact

dates being to the grand jurors unknown, the defend-

ants and co-conspirators engaged in an unlawful com-

bination and conspiracy in restraint of the hereinbefore

described interstate trade and commerce in violation

of Section 1 of the Act of Congress of July 2, 1890,

as amended, 15 U.S.C. Section 1, commonly known as

the Sherman Act.

15. The aforesaid combination and conspiracy con-

sisted‘ of a continuing agreement, understanding and

concert of action among the defendants and co-con-

spirators to allocate and divide alternate SDP pipe jobs

so that the manufacturers of steel SDP pipe considered

as a group on the one hand, and the manufacturers of

concrete SDP pipe considered together on the other

hand, would each obtain an agreed upon per cent of

all alternate SDP pipe jobs.

16. For the purpose of forming and effectuating

the aforesaid combination and conspiracy, the defend-

ants and co-conspirators did those things which, as

hereinbefore alleged, they combined and conspired to

do, including among others, the following things:

(a) Tallies were maintained by representatives

of each corporate defendant for the purpose of

keeping a record of whether a steel SDP pipe

manufacturer or a concrete SDP pipe manufacturer

obtained each job. Information needed for such

tallies was often obtainéd at meetings or by tele

phone conversations between the defendants or co-

conspirators. -

a OR

(b) Jobs for the following end users, among

others, were allocated to the steel SDP pipe group

or the concrete SDP pipe group of manufacturers

at meetings or by telephone conversations between

the defendants and co-conspirators: East Bay

Municipal Utility District, Oakland, California;

City of Phoenix, Arizona; Eastern Municipal Wa-

ter District, California; United States Corps of

Engineers, Walla Walla, Washington; Sonoma

County Flood Control and Water Conservation

District, Sonoma, California; Solano Irrigation

District, California; Las Virgenes Municipal Water

District, Calabasas, California; Marin Municipal

Water District, California; North Marin County

Water District, California; City of Long Beach;

Calleguas Metropolitan Water District; City of

Fountain Valley, California; Otay Municipal Wa-

ter District, California; Moulton Niguel Water

District, Santa Ana, California; City of Ocean-

side, California; United States Bureau of Reclama-

tion, California; Goleta County Water District,

California.

EFFECTS OF THE CONSPIRACY

17. The aforesaid combination and conspiracy

had, among others, the following effects:

(a) Competition between and among the de-

fendants and co-conspirators was restricted and

suppressed;

(b) General contractors and other awarding

authorities were deprived of the right to receive

competitive bids and quotations for alternate SDP

pipe and were deceived into believing collusive

= oe

and noncompetitive bids and quotations were com-

petitive; and

Western area was arbitrarily increased.

vil

JURISDICTION AND VENUE

18. The aforesaid combination and conspiracy was

formed and carried out, in part, within the Southern

District of California, Central Division, and within the

jurisdiction of this Court, within five years preceding

the return of this indictment.

Dated:

A TRUE BILL

Foreman

BARBARA J. SVEDBERG

Attorney, Department of Justice

DONALD J. FALLON

Attorney, Department of Justice

/s/ William H. Orrick, Jr.

WILLIAM H. ORRICK, JR.

Assistant Attorney General

HARRY G. SKLARSKY

Attorney, Department of Justice

STANLEY E. DISNEY

Attorney, Department of Justice

FRANCIS C. WHELAN

United States Attorney

Filed March 10, 1964. *

[Endorsement omitted in printing].

—45—

Indictment.

United States District Court, Southern District of

California, Central Division. —

United States of America, vs. United States Steel

Corporation; Smith-Scott, Inc.; United States Indus-

tries, Inc.; D. N. Chamberlain; P. M. Cobb; and Wil-

liam N. Scott. Criminal No. 33342.

The Grand Jury charges:

DEFINITIONS

1. As used herein, the term:

(a) “Steel small diameter pressure pipe,” referred

to herein as steel SDP pipe, means thin walled welded

steel pipe which is manufactured in diameters of 4

inches to 48 inches and sold for the conveyance of wa-

ter under internal pressures exceeding 115 feet of head

or 50 pound per square inch; .

(b) “Western Area” refers to California, Oregon,

Washington, Arizona, New Mexico, Utah, Wyoming,

Nevada, Idaho, and Hawaii;

install or have installed steel SDP pipe in systems pri-

marily for the conveyance of water or sewage under

pressure.

THE DEFENDANTS

2. Smith-Scott, Inc. (referred to herein as Smith-

Scott) is hereby indicted and made a defendant herein.

Said defendant is a corporation existing under the laws

of the State of California with its principal place of

business at 6501 Clay Street, Riverside, California.

During the period of time covered by this indictment,

said defendant engaged, among other things, in the

production and sale of steel SDP pipe to customers

located in the Western area.

3. United States Industries, Inc. (referred to here-

in as USI) is hereby indicted and made a defendant

herein, Said defendant is a Delaware Corporation which

in 1955 purchased the assets of Southern Pipe & Casing

Company, consisting of, among other things, a plant for

manufacturing steel SDP pipe which, during the period

covered by the indictment, it operated as the Tubular

Products Division of USI with headquarters at Azusa,

California. Said defendant, during this period, also

operated a plant for the manufacture of steel pipe in

4, United States Steel Corporation (referred to here-

in as U.S. Steel) is hereby indicted and made a de

fendant herein. Said defendant is a New Jersey cor-

poration which in 1948 acquired the Consolidated West-

ern Steel Corporation, which during the period of the

conspiracy it operated as a division of U.S. Steel.

Said defendant manufactures steel SDP pipe at a plant

in Linden, Utah, which is sold directly or through dis-

tributors to customers in the Western area.

5. Each of the individuals listed below is hereby

indicted and made a defendant herein. During the pe

riod of time covered by this indictment each said de-

fendant occupied the position with the defendant cor-

poration indicated below:

Name Position Defendant Company

D. N. Chamberlain Executive Vice Tubular Division of USI

P. M. Cobb Vice President, Consolidated Western

Ill

CO-CONSPIRATORS

6. Certain individuals, officers, and employees of

said defendants, not named defendants in this indict-

ment, participated as co-conspirators with said defend-

ants in the offense alleged herein and performed acts

and made statements in furtherance thereof.

TRADE AND COMMERCE INVOLVED

7. Steel SDP pipe is used for the conveyance of

drinking water under pressure and for irrigation and

sanitation systems. The construction of systems utilizing

steel SDP pipe is customarily contracted for by the end

user with general contractors on the basis of competi-

tive bids. Prior to submitting such bids, the general

contractors usually solicit quotations from pipe manu-

facturers for the purchase price of the pipe delivered

to the site where the pipe is to be installed. The award

winning contractor usually contracts for the purchase

of the pipe from the low quoting pipe manufacturer at

the price quoted by the latter. Occasionally the end user

contracts directly with a pipe manufacturer for the

purchase of steel SDP pipe and usually on the basis

of competitive bidding.

8. The corporate defendants are the principal man-

ufacturers of steel SDP pipe in the Western area.

Total sales of steel SDP pipe in the Western area dur-

ing the conspiracy herein alleged by the corporate

defendants averaged at least $13,500,000 annually.

Because of the relatively limited number of manufac-

turers of steel] SDP pipe, general contractors and end

users frequently solicit bids and quotations for said pipe

from manufacturers outside the State where said pipe

a” eee

is to be installed. Manufacturers of said pipe usually

manufacture the pipe for a particular job only after

receiving an order for it. Said manufacturers custom-

arily identify each section of pipe so as to designate

its position in the pipe line and deliver or have deliy-

ered said pipe direct to the trench site or as near as

possible to the place where it will be installed. During

the period of time covered by this indictment, the de-

fendants herein have manufactured substantial quanti-

ties of steel SDP pipe at their plants within the Western

area, and have sold, shipped, and delivered said pipe

to job sites outside the State where it was manufac-

tured. Thus said steel SDP pipe moves in a continuous

and uninterrupted flow from the place of manufacture,

including the plants of defendants herein, to points

of installation outside the State where said pipe was

manufactured.

9. Steel SDP pipe is fabricated largely from steel

plate. The defendant manufacturers purchase or produce

said steel plate in anticipation of orders for steel SDP

pipe or to enable them to fill existing orders for steel

SDP pipe. Substantial quantities of the steel plate which

the defendants use in manufacturing steel SDP pipe

within the Western area are produced outside the State

where said pipe is manufactured. The movement in

interstate commerce of the steel plate is necessary to

the. manufacture and sale of steel SDP pipe by the

defendants in the Western area and the defendants and

co-conspirators are conduits through which said steel

plate flows in a continuous uninterrupted stream in in-

terstate commerce from the, place where said plate is

produced to the place within the Western area where

the plate is fabricated into steel SDP pipe and on to

the final site where said pipe is installed.

10. Any restraint upon free competition in the

production or sale of steel SDP pipe in the Western

area necessarily and directly restrains and affects the

interstate flow of steel SDP pipe and the interstate

flow of the steel plate used in the fabrication of said

Pipe.

OFFENSE CHARGED

11. Beginning at least as early as May 1958, and

continuing thereafter until at least January 1962, the

exact dates being to the grand jurors unknown, the

defendants and co-conspirators engaged in an unlaw-

ful combination and conspiracy in restraint of the here-

inbefore described interstate trade and commerce in

violation of Section 1 of the Act of Congress of July

2, 1890, as amended, 15 U.S.C. § 1, commonly known

as the Sherman Act.

12. The aforesaid combination and conspiracy con-

sisted of a continuing agreement, understanding, and

concert of action among the defendants and co-con-

spirators, the substantial terms of which were:

(a) To submit collusive and rigged bids and

quotations for the sale of steel SDP pipe;

(b) To allocate and divide orders for the pur-

chase of steel SDP pipe among themselves.

13. For the purpose of forming and effectuating the

aforesaid combination and conspiracy, the defendants

and co-conspirators did those things which, as herein-

before alleged, they combined and conspired to do,

including, among others, the following things:

(a) Defendants and co-conspirators held pe-

riodic meetings to tally past orders and to discuss

Prospective orders for the purpose of allocating

prospective orders among defendants and co-con-

spirators according to pre-agreed percentages; and

(b) At such meetings and in subsequent tele-

phone conversations defendants and co-conspira-

tors agreed between and among themselves as to

which manufacturer would make the low bid and

which manufacturers would submit higher com-

plementary bids not intended to win awards on

such jobs. Jobs for the following end users, among

others, were thus allocated among the defendants:

East Bay Municipal Utility District; City of Phoe-

nix, Arizona; Eastern Municipal Water District,

California; Las Virgenes Municipal Water District,

Calabasas, California; Marin Municipal Water

District, California; North Marin County Water

District, California; Calleguas Metropolitan Water

District, California; City of Fountain Valley, Cali-

fornia; Otay Municipal Water District, California;

United States Bureau of Reclamation, California;

Goleta County Water District, California.

EFFECTS OF THE CONSPIRACY

14. The aforesaid combination and conspiracy had,

among others, the following effects:

(a) Competition between and among the de

fendants was restricted and suppressed;

(b) General contractors and end users were

deprived of the right to receive competitive bids

and quotations for steel SDP pipe and were de

ceived into believing cgllusive and noncompetitive

bids and quotations were competitive; and

ern area was arbitrarily increased.

tee

JURISDICTION AND VENUE

15. The aforesaid combination and conspiracy

was formed and carried out, in part, within the South-

ern District of California, Central Division, and within

the jurisdiction of this Court, reverie amet ad

ceding the return of this indictment. :

Dated:

A TRUE BILL

Foreman

BARBARA J. SVEDBERG

Attorney, Department of Justice

DONALD J. FALLON

Attorney, Department of Justice

/s/ William H. Orrick, Jr.

WILLIAM H. ORRICK, JR.

Assistant Attorney General

/s/ Harry G. Sklarsky

HARRY G. SKLARSKY

Attorney, Department of Justice

STANLEY E. DISNEY

Attorney, Department of Justice

FRANCIS C. WHELAN

United States Attorney

Filed March 10, 1964.

[Endorsement omitted in printing].

United States District Court, Southern District of

California, Central Division. ,

United States of America, vs. sneilin Pipe and

Construction Co. Criminal No. 33338.

On this 19th day of June, 1964, came the attorney

for the Government and the defendant appeared in per-

son and by counsel, Hill, Farrer & Burrill by Frank D.

MacDowell and William McD. Miller.

IT IS ADJUDGED that the defendant has been con-

victed upon his plea of nolo contendere of the offense

of engaging in an unlawful combination and conspiracy

in restraint of interstate trade and commerce, in viola-

tion of Title 15, United States Code, Section 1, as

charged in the Indictment and the Court having asked

the defendant whether he had anything to say why

judgment should not be pronounced, and no sufficient

cause to the contrary being shown or appearing to the

Court,

IT IS ADJUDGED that the defendant is guilty

[Convicted /s/ B] as charged and convicted.

IT IS ADJUDGED that the defendant pay a fine

unto the United States of America in the amount of

Five Thousand Dollars ($5,000.00)

IT IS ADJUDGED that the execution of the pay-

ment of the fine herein imposed is stayed for ten days.

/s/ Albert Lee Stephens, Jr.

United States District Judge

FILED: June 19, 1964.

JOHN A. CHILDRESS, Clerk

by /s/ L. Brosnan, ?

L. A. Brosnan, Deputy

Note: This Judgment amends the Judgment appearing

at page 70, infra.

—S53—

Judgment.

United States District Court, Southern District of

California, Central Division.

’ United States of America, vs. American Pipe and

Construction Co. Criminal No. 33340.

On this 19th day of June, 1964, came the attorney

for the Government and the defendant appeared in

person and by counsel, Hill, Farrer & Burrill by Frank

MacDowell and Wm. McD. Miller.

IT IS ADJUDGED that the defendant has: been

convicted upon his plea of nolo contendere of the of-

fense of engaging in an unlawful combination and con-

spiracy in restraint of interstate trade and commerce,

in violation of Title 15, United States Code, Séction 1,

as charged in the Indictment and the Court having

asked the defendant whether he had anything to say

why judgment should not be pronounced, and no suf-

ficient cause to the contrary being shown or appearing

to the Court,

IT IS ADJUDGED that the defendant is guilty

[Convicted /s/ B] as charged and convicted.

IT IS ADJUDGED that the defendant pay a fine

unto the United States of America in the amount of

Five Thousand Dollars ($5,000.00).

IT IS ADJUDGED that the execution of the pay-

ment of the fine herein imposed: is stayed for ten days.

/s/ Albert Lee Stephens, Jr.

United States District Judge

FILED: June 19, 1964

JOHN A. CHILDRESS, Clerk

by /s/ L. Brosnan.

L. A. Brosnan, Deputy

——

Judgment.

United States District Court, Southern District of

California, Central Division.

United States of America, vs. American Pipe and

Construction Co. Criminal No. 33341.

On this 19th day of June, 1964, came the attorney

for the Government and the defendant appeared in per-

son and by counsel, Hill, Farrer & Burrill by Frank

MacDowell and Wm. McD. Miller.

IT IS ADJUDGED that the defendant has beea

convicted upon his plea of nolo contendere of the of

fense of engaging in an unlawful combination anu

conspiracy in restraint of interstate trade and com-

merce, in violation of Title 15, United States Code,

Section 1, as charged in the Indictment and the Court

having asked the defendant whether he had anything

to say why judgment should not be pronounced, and

no sufficient cause to the contrary being shown or ap

pearing to the Court,

IT IS ADJUDGED that the defendant is guilty [Con-

victed /s/ B] as charged and Convicted.

IT IS ADJUDGED that the defendant pay a fine

unto the United States of America in the amount of

Seven Thousand Dollars ($7,000.00).

IT IS ADJUDGED that the execution of the pay-

ment of the fine herein imposed is stayed for ten days.

/s/ Albert Lee Stephens, Jr.

United States District Judge

FILED: June 19, 1964

JOHN A. CHILDRESS, Clerk

by /s/ L. Brosnan

L. A. Brosnan, Deputy

Note: This Judgmént amends the Judgment appearing

at page 69, infra.

—S55—

Judgment.

United States District Court, Southern District of

California, Central Division.

United States of America, vs. United Concrete Pipe

Corp. Criminal No. 33338. .

On this 19th day of June, 1964, came the attorney

for the Government and the defendant appeared in

person and by counsel, Gibson, Dunn & Crutcher by

John J. Hanson.

IT IS ADJUDGED that the defendant has been

convicted upon his plea of nolo contendere of the

offense of engaging in an unlawful combination and

conspiracy in restraint of interstate trade and com-

merce, in violation of Title 15, United States Code,

Section 1, as charged in the Indictment and the Court

having asked the defendant whether he had anything

to say why judgment should not be pronounced, and

no sufficient cause to the contrary being shown or ap-

pearing tothe Court, —

IT IS ADJUDGED that the defendant is guilty

[Convicted /s/ B] as charged and convicted.

IT IS ADJUDGED that the defendant pay a fine

unto the United States of America in the amount of

Five Thousand Dollars. ($5,000.00)

IT IS ADJUDGED that the execution of the pay-

ment of the fine herein imposed is stayed for ten days.

/s/ Albert Lee Stephens, Jr.

United States District Judge

FILED: June 19, 1964

JOHN A. CHILDRESS, Clerk

by /s/ L. Brosnan

L. A. Brosnan, Deputy

—S6—

Judgment.

United States District Court, Southern District of

California, Central Division.

United States of America, vs. United Concrete Pipe

Corp. Criminal No. 33340.

On this 19th day of June, 1964, came the attorney

for the Government and the defendant appeared in

person and by counsel, Gibson, Dunn & Crutcher by

John J. Hanson. :

IT IS ADJUDGED that the defendant has been

convicted upon his plea of nolo contendere of the of-

fense of engaging in an unlawful combination and con-

spiracy in restraint of interstate trade and commerce,

in violation of Title 15, United States Code, Section 1,

as charged in the Indictment and the Court having

asked the defendant whether he had anything to say

why judgment should not be pronounced, and no suffi-

cient cause to the contrary being shown or appearing

to the Court,

IT IS ADJUDGED that the defendant is guilty

[Convicted /s/ B] as charged and convicted.

IT IS ADJUDGED that the defendant pay a fine

unto the United States of America in the amount of

Five Thousand Dollars ($5,000.00).

IT IS ADJUDGED that the execution of the pay-

ment of the fine herein imposed is stayed for ten days.

/s/ Albert Lee Stephens, Jr.

United States District Judge

FILED: June 19, 1964

JOHN A. CHILDRESS, pt

by /s/ L. Brosnan

L.A. Brosnan, Deputy

Note: This Judgment amends the Judgment appearing

at page 68, infra.

—$7——

Judgment.

United States District Court, Southern District: of

California, Central Division.

United States of America, vs. United Concrete Pipe

Corporation. Criminal No. 33341.

On this 19th day of June, 1964, came the attorney

for the Government and the defendant appeared in

person and by counsel, Gibson, Dunn & Crutcher by

John F. Hanson.

IT IS ADJUDGED that the defendant has been

convicted upon his plea of nolo contendere of the of-

fense of engaging in an unlawful combination and

conspiracy in restraint of interstate trade and commerce,

in violation of Title 15, United States Code, Section i,

as charged in the Indictment and the Court having asked

the defendant whether he had anything to say why

judgment should not be pronounced, and no sufficient

cause to the contrary being shown or appearing to the

Court,

IT IS ADJUDGED that the defendant is guilty [Con-

victed /s/ B] as charged and convicted:

IT IS ADJUDGED that the defendant pay a fine un-

to the United States of America in the amount of Five

Hundred Dollars ($500.00).

IT IS ADJUDGED that the execution of the pay-

ment of the fine herein imposed is stayed for ten days.

/s/ Albert Lee Stephens, Jr.

United States District Judge

FILED: June 19, 1964

JOHN A. CHILDRESS, Clerk

by /s/ L. Brosnan

L. A. Brosnan, Deputy

—58—

Judgment.

United States District Court, Southern District o

California, Central Division.

United States of America, vs. idles ‘Sueid ‘Chichen

tion. Criminal No. 33339.

On this 19th day of June, 1964, came the attorne:

for the Government and the defendant appeared ir

person and by counsel, Gordon Johnson and James W

Baldwin.

IT IS ADJUDGED that the defendant has beer

convicted upon his plea of nolo contendere of the of

fense of engaging in an unlawful combination and con

spiracy in restraint of interstate trade and commerce

in violation of Title 15, United States Code, Section 1,

as charged in: the Indictment and the Court havin;

asked the defendant whether he had anything to say

why judgment should not be pronounced, and no suffi

cient cause to the contrary being shown or appearing

to the Court,

IT IS ADJUDGED that the defendant is guilty [Con.

victed /s/ B] as charged and convicted.

IT IS ADJUDGED that the defendant pay a fine

unto the United States of America in the amount of One

Thousand Dollars ($1,000.00).

IT IS ADJUDGED that the execution of the pay-

ment of the fine herein imposed is stayed for ten days.

/s/ Albert Lee Stephens, Jr.

United States District Judge

FILED: June 19, 1964

JOHN A. CHILDRESS, Clerk

by /s/ L. Brosnan

L. A. Brosnan, Deputy

Note: This Judgment amends the Judgment appearing

at page 71, infra.

—s9—

Judgment.

United States District Court, Southern District of

California, Central Division.

United States of America, vs. Kaiser Steel Corpora-

tion. Criminal No. 33340,

On this 19th day of June, 1964, came the attorney

for the Government and the defendant appeared in per-

son and by counsel, Gordon Johnson and James Bald-

win.

IT IS ADJUDGED that the defendant has been

convicted upon his plea of nolo contendere of the of-

fense of engaging in an unlawful combination and

conspiracy in restraint of interstate trade and com-

merce, in violation of Title 15, United. States Code,

Section 1, as charged in the Indictment and the Court

having asked the defendant whether he had anything

to say why judgment should not be pronounced, and

no sufficient cause to the contrary being shown or

appearing to the Court,

IT IS ADJUDGED that the defendant is guilty [Con-

victed /s/ B] as charged and convicted.

IT IS ADJUDGED that the defendant pay a fine

unto the United States of America in the amount of

Two Thousand Dollars ($2,000.00).

IT IS ADJUDGED that the execution of the pay-

ment of the fine herein imposed is stayed for ten days.

/s/ Albert Lee Stephens, Jr.

United States District Judge

FILED: June 19, 1964

JOHN A. CHILDRESS, Clerk

by /s/ L. Brosnan M4

L. A. Brosnan, Deputy

sili

Judgment.

United States District Court, Southern District.

» United States of America, vs. U. S. Industries, In

Charged as United: States Industries, Inc. Criminal N

33341.

_ On this:19th day of June, 1964, came the attorn

for. the Government and the defendant appeared.

person and by counsel, Paul, Hastings, Janofsky

Walker by Oliver F. Green, Jr.

‘IT IS ADJUDGED that the defendant has be

convicted upon his plea of nolo contendere of ti

Offense of engaging in an unlawful combination ar

conspiracy in restraint of interstate trade and cor

merce, in violation of Title 15, United States Cod

Section 1, as charged in the Indictment and the Cou

_ shaving asked the defendant whether he had anythir

to say why judgment should not be pronounced, and 1

sufficient cause to the contrary being shown or a

pearing to the Court,

IT IS ADJUDGED that the defendant is guilty [Co

victed /s/ B] as charged and convicted.

IT IS ADJUDGED that the defendant pay a fir

unto the United States of America in the amount «

Four Thousand Dollars ($4,000.00).

IT IS ADJUDGED that the execution of the pa

ment of the fine herein imposed is stayed for ten day

/s/ Albert Lee Stephens, Jr.

United States District Judge

FILED: June 19, 1964

JOHN A. CHILDRESS, Clerk

by /s/ L. Brosnan

L. A. Brosnan, Deputy

cilia

Judgment.

United States District Court, Southern District of

California, Central Division.

United States of America, vs. U.S. Industries, Inc.,

Charged as United States Industries, Inc. Criminal No.

33342,

On this 19th day of June, 1964, came the attorney

for the Government and the defendant appeared in

person and by counsel, Paul, Hastings, Janofsky &

Walker by Oliver F. Green, Jr.

IT IS ADJUDGED that the defendant has been

convicted upon his plea of nolo contendere of the of-

fense of engaging in an unlawful combination and

conspiracy in restraint of interstate trade and com-

merce, in violation of Title 15, United States Code,

Section 1, as charged in the Indictment and Co

having asked the defendant whether he |

to say why judgment should not be pronounced, and

no sufficient cause to the contrary being shown or ap-

pearing to the Court,

IT IS ADJUDGED that the defendant is guilty [Con-

victed /s/ B] as charged and convicted.

IT IS ADJUDGED that the defendant pay a fine

unto the United States of America in the amount of

Four Thousand Dollars ($4,000.00).

IT IS ADJUDGED that the execution of the payment

of the fine herein imposed is stayed for ten days.

/s/ Albert Lee Stephens, Jr.

United States District Judge

FILED: June 19, 1964

JOHN A. CHILDRESS, Clerk

by /s/ L. Brosnan

L. A. Brosnan, Deputy

Judgment.

United. States District Court, Southern District of

California, Central Division.

United ‘States of America, vs. Smith-Scott, Co., Inc.,

charged as Smith-Scott, Inc. Criminal No. 33341.

On this 19th day of June, 1964, came the attorney

for the Government and the defendant appeared in

ements linerenere asec Somaibedimagensi:

John F. Hanson.

IT IS ADJUDGED that the defendant has been

convicted upon his plea of nolo contendere of the

offense of engaging in an unlawful combination and

conspiracy in restraint of interstate trade and com-

merce, in violation of Title 15, United States Code, Sec-

tion 1, as charged in the Indictment and the Coutt

having asked the defendant whether he had anything

to say why judgment should not be pronounced, and

no sufficient cause to the contrary being shown or ap-

pearing to the Court,

IT IS ADJUDGED that the defendant is guilty

[Convicted /s/ B] as charged and convicted.

IT IS ADJUDGED that the defendant pay a fine

unto the United States of America in the amount of

One Thousand Dollars. ($1,000.00)

IT IS ADJUDGED that the execution of the pay-

ment of the fine herein imposed is stayed for ten days.

/s/ Albert Lee Stephens, Jr.

United States District Judge

FILED: June 19, 1964

JOHN A. CHILDRESS, Clerk

by /s/ L. Brosnan

L. A. Brosnan, Deputy inca

nell,

Judgment.

United States District Court, Southern District of

California, Central Division.

United States of America, vs. Smith-Scott, Co., Inc.,

charged as Smith-Scott, Inc. Criminal No. 33342.

On this 19th day of June, 1964, came the attorney

for the Government and the defendant appeared in per-

son and by counsel, Gibson, Dunn & Crutcher .by

John F. Hanson.

IT IS ADJUDGED that the defendant has been

convicted upon his plea of nolo contendere of the of-

fense of engaging in an unlawful combination and con-

spiracy in restraint of interstate trade and commerce,

in violation of Title 15, United States Code, Section A,

as charged in the Indictment and the Court having

asked the defendant whether he had anything to say

why judgment should not be pronounced, and no suf-

ficient cause to the contrary being shown or appearing

to the Court,

IT IS ADJUDGED that the defendant is guilty

[Convicted /s/ B] as charged and convicted.

IT IS ADJUDGED that the defendant pay a fine

unto the United States of America in the amount of

One Thousand Dollars ($1,000.00).

IT IS ADJUDGED that the execution of the pay-

ment of the fine herein imposed is stayed for ten days.

/s/ Albert Lee Stephens, Jr.

United States District Judge

FILED: June 19, 1964

JOHN A. CHILDRESS, Clerk

by /s/ L. Brosnan

L. A. Brosnan, Deputy —

Judgment.

United ‘States: District Court, Southern District

California, Central Division.

United States of ‘America, vs. United States Si

Corporation. Criminal No. 33339.

On this 19th day of June, 1964, came the attor:

for the Government and the defendant appeared

person and by counsel, Musick, Peeler & Garrett 2

Jesse R. O'Malley.

IT IS ADJUDGED that the defendant has been c

victed upon ‘his plea of nolo contendere of the offe:

of engaging in an unlawful combination and conspir:

in restraint. of interstate trade and commerce, in v

lation of Title 15, United States Code, Section 1,

charged in the Indictment and the Court having ask

the defendant whether he had anything to say w

judgment should not be pronounced, and no su

cient cause to the contrary being shown or appeari

to the Court,

IT IS ADJUDGED that the defendant is gui

[Convicted /s/ B] as charged and convicted.

IT IS ADJUDGED that the defendant pay a f

unto the United States of America in the amount

Two Thousand Dollars ($2,000.00)

IT IS ADJUDGED that the execution of the p

ment of the fine herein imposed is stayed for ten days.

/s/ Albert Lee Stephens, Jr.

United States District Judge

FILED: June 19, 1964 _

JOHN A. CHILDRESS, Clerk

by /s/ L. Brosnan

L. A. Brosnan, Deputy

a ee

sel te

Judgment.

United States District Court, Southern District of

California, Central Division.

United States of America, vs. United States Steel

Corporation. Criminal No. 33340.

On this 19th day of June, 1964, came the attorney

for the Government and the defendant appeared in

person and by counsel, Musick, Peeler & Garrett and

Jesse R. O’Malley.

IT IS ADJUDGED that the defendant has been con-

victed upon his plea of nolo contendere of the offense

of engaging in an unlawful combination and conspiracy

in restraint of interstate trade and commerce, in viola-

tion of Title 15, United States Code, Section 1, as

charged in the Indictment and the Court having asked

the defendant whether he had anything to say why

judgment should not be pronounced, and no sufficient

cause to the contrary being shown or appearing to the

Court,

IT IS ADJUDGED that the defendant is guilty

[Convicted /s/ B] as charged and convicted,

IT IS ADJUDGED that the defendant pay a fine

unto the United States of America in the amount of

One Thousand Dollars ($1,000.00).

IT IS ADJUDGED that the execution of: the pay-

ment of the fine herein imposed is stayed for ten days.

/s/ Albert Lee Stephens, Jr.

United States District Judge

FILED: June 19, 1964

JOHN A. CHILDRESS, Clerk

by /s/ L. Brosnan

L. A. Brosnan, Deputy

Judgment.

United States District Court, Southern District of

California, Central Division.

United States of America, vs. United States Steel

Corporation. Criminal No. 33341.

On this 19th day of June, 1964, came the attorney

for the Government and the defendant appeared in

person and by counsel, Musick, Peeler & Garrett and

Jesse R. O’Malley.

IT IS ADJUDGED that the defendant has been con-

victed upon his plea of nolo contendere of the of

fense of engaging in an unlawful combination and

conspiracy in restraint of interstate trade and commerce,

in violation of Title 15, United States Code, Section 1,

as charged in the Indictment and the Court having

asked the defendant whether he had anything to say

why judgment should not be pronounced, and no suf-

ficient cause to the contrary being shown or appearing

to the Court,

IT IS ADJUDGED that the defendant is guilty

[Convicted /s/ B]} as charged and convicted.

IT IS ADJUDGED that the defendant pay a fine

unto the United States of America in the amount of

One Thousand Dollars ($1,000.00).

IT IS ADJUDGED that the execution of the pay-

ment of the fine herein imposed is stayed for ten

days.

/s/ Albert Lee Stephens, Jr.

United States District Judge

FILED: June 19, 1964

JOHN A. CHILDRESS, Clerk

by /s/ L. Brosnan

L. A. Brosnan, Deputy

—67—

Judgment.

United States District Court, Southern District of

United States of America, vs. United States Steel

Corporation. Criminal No. 33342.

On this 19th day of June, 1964, came the attorney

for the Government and the defendant appeared in

person and by counsel, Musick, Peeler & Garrett and

Jesse R. O’Malley.

IT IS ADJUDGED that the defendant has been con-

victed upon his plea of nolo contendere of the offense

of engaging in an unlawful combination and conspir-

acy in restraint of interstate trade and commerce, in

violation of Title 15, United States Code, Section 1,

as charged in the Indictment and the Court having

asked the defendant whether he had anything to say

why judgment should not be pronounced, and no suf-

ficient cause to the contrary being shown or appearing

to the Court,

IT IS ADJUDGED that the defendant is guilty

[Convicted /s/ B] as charged and convicted.

IT IS ADJUDGED that the defendant pay a fine

unto the United States of America in the amount of

One Thousand Dollars. ($1,000.00)

IT IS ADJUDGED that the execution of the pay-

ment of the fine herein imposed is stayed for ten days.

/s/ Albert Lee Stephens, Jr.

United States District Judge

FILED: June 19, 1964

JOHN A. CHILDRESS, Clerk

by /s/ L. Brosnan

L. A. Brosnan, Deputy

—

Judgment.

United States District Court, Southern District of

California, Central Division. |

United States of America vs. United Concrete Pipe

Corp. Criminal No. 33340.

On this 19th day of June, 1964, came the attorney

for the Government and the defendant appeared in

person and by counsel, Gibson, Dunn & Crutcher by

John J. Hanson.

IT IS ADJUDGED that the defendant has been

convicted upon his plea of nolo contendere of the of-

fense of engaging in an unlawful combination and con-

spiracy in restraint of interstate trade and commerce,

in violation of Title 15, United States Code, Section 1,

as charged in the Indictment and the Court having

asked the defendant whether he had anything to say

why judgment should not be pronounced, and no suf-

ficient cause to the contrary being shown or appearing

to the Court,

IT IS ADJUDGED that the defendant is guilty as

charged and convicted.

IT IS ADJUDGED that the defendant pay a fine

unto the United States of America in the amount of

Five Thousand Dollars ($5,000.00).

IT IS ADJUDGED that the execution of the pay-

ment of the fine herein imposed is stayed for ten days.

/s/ Albert Lee Stephens, Jr.

United States District Judge

FILED: June 19, 1964

JOHN A. CHILDRESS, Clerk

by /s /L. Brosnan

L. A. Brosnan, Deputy

tists

Judgment.

United States District Court, Southern District of

California, Central Division.

United States of America, vs. American Pipe and

Construction Co. Criminal No. 33341.

On this 19th day of June,’ 1964, came the attorney

for the Government and the defendant appeared in

person and by counsel, Hill, Farrer & Burrill by Frank

MacDowell and Wm. McD. Miller.

IT IS ADJUDGED that the defendant has been

convicted upon his plea of nolo contendere of the of-

fense of engaging in an unlawful combination and con-

spiracy in restraint of interstate trade and commerce,

in violation of Title 15, United States Code, Section 1,

as charged in the Indictment and the Ccurt having

asked the defendant whether he had anything to say

why judgment should not be pronounced, and no

sufficient cause to the contrary being shown or appear-

ing to the Court, :

IT IS ADJUDGED that the defendant is guilty as

IT IS ADJUDGED that the defendant pay a fine

unto the United States of America in the amount of

Seven Thousand Dollars ($7,000.00).

IT IS ADJUDGED that the execution of the pay-

ment of the fine herein imposed is stayed for ten days.

/s/ Albert Lee Stephens, Jr.

United States District Judge

FILED: June 19, 1964

JOHN A. CHILDRESS, Clerk

by /s/ L. Brosnan }

L. A. Brosnan, Deputy

—70—

United States District Court, Southern District of

California, Central Division.

United States of America, vs. American Pipe and

Construction Co. Criminal No. 33338.

On this 19th day of June, 1964, came the attorney

for the Government and the defendant appeared in

person and by counsel, Hill, Farrer & Burrill by Frank

D. MacDowell and William McD. Miller.

IT IS ADJUDGED that the defendant has been con-

victed upon his plea of nolo contendere of the offense

of engaging in an unlawful combination and conspir-

acy in restraint of interstate trade and commerce, in

violation of Title 15, United States Code, Section 1,

as charged in the Indictment and the Court having

asked the defendant whether he had anything to say

why judgment should not be pronounced, and no suf-

ficient cause to the contrary being shown or appear

ing to the Court,

IT IS ADJUDGED that the defendant is guilty as

charged and convicted.

IT IS ADJUDGED that the defendant pay a fine

unto the United States of America in the amount of

Five Thousand Dollars ($5,000.00).

IT IS ADJUDGED that the execution of the pay-

ment of the fine herein imposed is stayed for ten days.

/s/ Albert Lee Stephens, Jr.

United States District Judge

FILED: June 19, 1964

JOHN A. CHILDRESS, Clerk

by /s/ L. Brosnan

L. A. Brosnan, Deputy

Judgment.

United States District Court, Southern rae of

‘California, Central Division.

sisted Shitah sit Aiehelce, cm. Keaton, Senet: Chepean-

tion. Criminal No. 33339.

On this 19th day of June, 1964, came the attorney

for the Government and the defendant appeared in

person and by counsel, Gordon Johnson and James

W. Baldwin.

IT IS ADJUDGED that the defendant has been

convicted upon his plea of nolo contendere of the of-

fense of engaging in an unlawful combination and

conspiracy in restraint of interstate trade and com-

merce, in violation of Title 15, United States Code,

Section 1, as charged in the Indictment and the Court

having asked the defendant whether he had anything

to say why judgment should not be pronounced, and

no sufficient cause to the contrary being shown or

appearing to the Court,

IT IS ADJUDGED that the defendant is guilty as

charged and convicted.

IT IS ADJUDGED that the defendant pay a fine

unto the United States of America in the amount of

One Thousand Dollars ($1,000.00)

IT IS ADJUDGED that the execution of the payment

of the fine herein imposed is stayed for ten days.

/s/ Albert Lee Stephens, Jr.

United States District Judge

FILED: June 19, 1964

JOHN A. CHILDRESS, Clerk

by /s/ L. Brosnan

L. A. Brosnan, Deputy

a. won

Complaint.

United States District Court, Southern District of

California, Central Division.

United States of America, Plaintiff, vs. American

Pipe and Construction Co. and United Concrete Pipe

Corp., Defendants. Civil No. 64-832-TC.

The United States of America, plaintiff herein, by

its attorneys, brings this civil action against the above-

named defendants in two counts. As a first claim, the

United States of America, in its capacity as purchaser

of concrete pipe for use by those Federal governmen-

tal organizations engaged in the construction of systems

‘to convey water and sewage throughout the western

area of the United States, brings this suit under the

False Claims Act (31 U.S.C. §§ 231-233) for double

the amount of damages suffered by it due to defend-

‘ants’ acts, plus forfeitures (Count I). Alternatively,

the United States of America in its aforesaid capacity

as purchaser of concrete pipe for use by Federal gov-

ernmental organizations brings this suit under Section

4A of the Clayton Act (15 U.S.C. § 15A) to recover

its actual damages (Count II). The plaintiff waives its

right of recovery under Counts I and II hereof for any

purchase for which it recovers damages under any other

complaint concerning related conspiracies filed by the

plaintiff concurrently with the filing of this complaint.

COUNT I

1. As a first claim, the United States of America

in its capacity as purchaser of concrete pipe for use

by those Federal governmeptal organizations engaged

in the construction of systems to convey water and sew-

age throughout the western area of the United States,

brings this suit under Sections 3490, 3491, 3492 and

ilies

5438 of the Revised Statutes (31 U.S.C. §§ 231-233),

commonly known as the False Claims Act.

2. Each of the defendants maintains an office,

transacts business and is found within the Southern

District of California.

3. Each of the corporations listed below is made

a defendant herein. Each of said corporations is or-

ganized and exists under the laws of the State. indi-

cated. Each defendant is engaged in the business of

manufacturing and of selling concrete pipe principally

in the city indicated in the western area.

State of incipal Place

Name of Company Incorporation of Business

American and California Monterey Park,

Cons Co. : California

(referred to as ;

American):

United Concrete Pipe California Baldwin Park,

. (referred California

to as United)

4. Inasmuch as all defendants are corporations, no

defendant is in the military or naval forces of the

United States, or in the militia called into or actually

employed in the service of the United States.

5. The acts alleged in this complaint to have been

done by each of the defendants were authorized, or-

dered, or done by the officers, agents, employees, or

representatives of each defendant while actively en-

gaged in the management, direction, or control of its

affairs.

6. American Concrete Pipe Co. is engaged in the

business of manufacturing and of selling concrete pipe

in the western area, is a subsidiary of American and

is incorporated in the State of Arizona. It and various

other companies not made defendants herein, par-

- (b) “Metal components” refers to steel sheet:

skelp, rods, wire and mesh used. in the -

ture of concrete pipe;

gon, Washington, Arizona, New Mexico, Utah,

Wyoming, Nevada, Idaho, and Hawaii;and

(d) “End users” means customers who. pur-

chase and install or have installed concrete pipe

to transport drinking water and for sanitation,

drainage, irrigation, flood contro] and similar pur-

poses.

8. The construction of systems utilizing concrete

pipe is often contracted for by the end user with gen

eral contractors on the basis of sealed competitive bids,

Prior to submitting such bids, the general contractors

solicit quotations from pipe manufacturers for the put

chase price of the pipe delivered to the site where the

pipe is to be, installed. Thus the pipe manufacturer

knows who the end user will be. The award winning

contractor purchases the pipe from the low quoting

pipe manufacturer at the price quoted by the latter and

passes this price along to the end user. End users also

purchase pipe directly from pipe ae: ae

on the basis of sealed competitive bids.

¥2

elas

ufacturers of concrete pipe inthe western area. and

during the period 1958 through 1961 their average an-

nual sales of concrete pipe in the western area. were

at least $41,500,000. Because of the relatively limited

number of manufacturers of concrete pipe, general con-

tractors and end users frequently solicit bids for said

pipe from manufacturers outside the State where said

pipe is to be installed. Manufacturers of said pipe

usually manufacture the pipe for a particular job only

after receiving an order for it, Said manufacturers. cus-

tomarily identify each section of pipe so as to. desig-

nate its position in the pipe line and deliver or have

delivered said pipe \direct to the trench side or as near

as possible to the place where it will be installed. Dur-

ing the period of time covered by this complaint, the

defendants herein have manufactured substantial quan-

tities of concrete pipe at their plants within the west-

em area, and have sold, shipped, and delivered said

pipe to job sites outside the State where it was man-

ufactured. Thus said concrete pipe moves in a con-

tinuous and uninterrupted flow from the place of man-

ufacture to points of installation outside the State

where said pipe was manufactured.

10. Most concrete pipe, as it is manufactured, is

reinforced with metal components both to strengthen

the pipe and, particularly with respect to concrete pres-

sure pipe, to make it watertight. The defendant man-

ufacturers purchase said metal components in antici-

pation of orders or to enable them to fill existing or-

ders for concrete pipe. Substantial quantities of the

metal components are produced outside the State

where said pipe is manufactured. The movement in in-

terstate commerce of the metal components is necessary

: slllloiin

to the manufacture and sale of concrete pipe by the

defendants in the western area and the defendants and

co-conspirators are conduits through which said metal

components flow in a continuous uninterrupted stream

in interstate commerce from the place where said com-

ponents are produced to the place where the compo.

nents are incorporated into concrete pipe and on to the

final site where said pipe is installed.

11. Any restraint upon free competition in the

production or sale of concrete pipe in the western area

necessarily and directly restrains and affects the inter-

state flow of concrete pipe and the metal components

used in the construction of said pipe.

12. During the period covered by this complaint,

the plaintiff through its various executive departments

and agencies has purchased substantial quantities of

concrete pipe for use in the construction of systems to

convey water and sewage throughout the western area

of the United States. Plaintiff purchased some amounts

of the said concrete pipe pursuant to direct sealed com-

petitive bidding procedures and in accordance with this

practice and for the purpose of letting contracts, it

advertised and called for bids from pipe manufacturers,

including defendants, seeking to supply concrete pipe

to plaintiff. Plaintiff has also purchased some amounts

of the said concrete pipe pursuant to direct sealed

competitive bidding procedures in accordance with

which it advertised and called for bids from general

contractors seeking to construct systems to convey

water and sewage for plaintiff. Said contractors in tum

solicited bids and quotations from the pipe manufac

turers, including defendants, for the concrete pipe to be

used in the said system. The bids or quotations tem

dered by the pipe manufacturers to the contractors were

aK ae

incorporated into the sealed bids submitted by the con-

tractors to the plaintiff. The pipe manufacturers, in-

cluding defendants and co-conspirators, knew that the

bids or quotations which they submitted to the con-

tractor for the concrete pipe would be thus incorporated

into the bids submitted by the contractor to the plain-

tiff, that the price of said concrete pipe represented a

substantial portion of the entire bid submitted by the

contractor to the plaintiff and that said price would be

paid by the plaintiff either directly to the pipe manu-

facturer or to the contractor who, in turn, would pay

said price to the pipe manufacturer.

13. Beginning in or prior to the year 1954 and

continuing thereafter until at least August 1962, the

exact dates being to the plaintiff unknown, defend-

ants, together with the co-conspirators knowingly com-

bined, conspired and agreed to defraud and injure the

United States by obtaining or aiding to obtain the

payment or allowance of false or fraudulent claims un-

der contracts awarded them for the sale of concrete

pipe during said period.

14. The aforesaid combination and conspiracy has

consisted, among other things, of a continuing agree-

ment, understanding, and concert of action among

the defendants and co-conspirators to submit collusive

and rigged bids for the sale of concrete pipe and to

allocate and divide orders for the purchase of con-

crete pipe among themselves,

15. During the period of time covered by this com-

plaint, the defendants and co-conspirators, for the pur-

pose of forming and effectuating the aforesaid com-

bination and conspiracy, and in furtherance thereof,

have done, among other things, the following:

(a) In or about 1954 the presidents of Ameri

can and United, plus a vice president of each

defendant, attended several meetings at Ameri

can’s office in South Gate. At these meetings a

working agreement which had been in effect for

some time between the two companies was reaf-

firmed. The agreement included the following

terms:

(i) that of the total concrete pipe sales made

by the two defendants, except for sales in the

northwest, approximately 60 per cent would be

taken by American and approximately 40 per

cent would be taken by United; ;

(ii) that in the northwest (Washington ard

Oregon) 55 per cent of the total sales made

by the two defendants would be taken by Amer-

: ican and 45 per cent would be taken by United;

(iii) that wherever the two defendants en-

countered competition from other manufactur-

ers of concrete pipe every effort would be made

to bring such manufacturers into the conspir-

acy and allot each a percent of the market

based on its historical position within its area

of operation;

(iv) that meetings would be held at approx

imately six month intervals between the presi-

dents of American and United and other rep

resentatives of the defendants and co-conspire

tors to discuss and decide in advance which

company would be entitled to submit: the lowest

bid on each major,job known to be scheduled

for installation in the near future; 4

(v) that information would be exchanged

regularly between representatives of the defené

—79—

ants and co-conspirators to enable each cor-

porate participant to keep a record of the

amount of business secured by each such par-

ticipant;

(vi) that before final bids or quotations were

submitted on each job of any importance, agree-

ment would be reached by representatives of

the defendants and co-conspirators on the dol-

lar amount to be bid by each defendant or co-

conspirator;

(vii) that bids would be submitted in such a

way as to create the semblance of competitive

bidding and pricing.

(b) The terms of this agreement were adhered

to by the defendants throughout the period of

this complaint, except that in or about 1960 or

1961, the exact date being unknown to the plain-

tiff, the percentage allocation between American

and United was changed from a ratio of 60/40

’ to a ratio of 58/42 in favor of American in all

areas outside of the northwest.

16. Pursuant to said combination and .

and as a result of the acts done in furtherance there-

of, defendants have been awarded contracts for the

sale of concrete pipe, and have received payments

thereunder, on the basis of bids and quotations which

they submitted and which they falsely or fraudulently

represented to be bona fide, independent, competitive,

and not the product of any collusion or agreement be-

tween the bidders, and the

mal, reasonable and competitive whereas, in fact known

to defendants but unknown to plaintiff, the said bids

. me eae

submitted were sham and collusive and not the result

of open competition, and prices therefor were unrea-

sonable, arbitrary, and noncompetitive.

™ 17. With respect to each such contract awarded for

the supply of concrete pipe during the aforesaid period

of the conspiracy, the defendant to which such con.

tract was awarded presented and/or caused to be

presented to plaintiff for payment or approval by it

numerous claims, knowing such claims to be false, fic-

titious or fraudulent in that such claims were based

on a contract which had been falsely or fraudulently

procured by reason of the aforesaid bidding practice.

18. Asa result of the presentment to it of the afore-

said false or fraudulent claims, and without knowledge

thereof, plaintiff has paid the false or fraudulent claims

to defendants or to contractors to whom defendants

submitted bids.

19. As a result of the illegal combination and con-

spiracy and the defendants’ acts in furtherance there-

of, plaintiff has been compelled to pay substantially

higher prices for concrete pipe than would have been

the case but for the illegal conduct complained of here-

in, and has been financially damaged by defendants,

the amount of which is presently undetermined.

20. WHEREFORE, the United States of America:

(a) Demands judgment against defendants for

Two Thousand Dollars ($2,000.00) for the said

conspiracy, for double the amount of the damages

it has sustained, and for such other forfeitures as

are allowable by law, as provided in Sections

aniline

* 3490, 3491, 3492 and 5438 of the Revised Stat-

utes (31 U.S.C, §§ 231-233) together with inter-

est thereon and the costs of this suit; and

(b) Prays.that it recover such other amounts

and have such other and further relief as the

Court shall deem just.

COUNT II

21. As an alternative claim, the United States of

America, in its aforesaid capacity as purchaser of con-

crete pipe for use by Federal governmental organiza-

tions, brings this suit against the defendants under Sec-

tion 4A of the Act of Congress of October 15, 1914,

¢. 323, 38 Stat. 731, as amended (15°'U.S.C. § 15A),

entitled “An Act to supplement existing laws against

unlawful restraints and monopolies, and for other pur-

poses,” commonly known as the Clayton Act, to re-

cover damages which it has sustained due to violations

by defendants of Section 1 of the Sherman Act (15

U.S.C, §1). :

22. Plaintiff realleges as part of this claim each

and all of the allegations contained in 2 and 3, and 5

through 11 of Count I hereof, with like effect as if

herein fully repeated.

23. Beginning in or prior to the year 1954 and

continuing thereafter until at least August 1962, de-

fendants, together with the co-conspirators, have en-

gaged in a combination and conspiracy in unreason-

able restraint of the aforesaid interstate trade and com-

merce in concrete pipe in the western area, in violation

of Section 1 of the Sherman Act.

—82—

24. The aforesaid combination and conspiracy has

consisted of a continuing agreement, understanding,

and concert of action among the defendants and co-

conspirators to submit collusive and rigged bids for

the sale of concrete pipe and to allocate and divide or.

ders for the purchase of concrete pipe among them.

selves.

25. During the period of time covered by this com-

plaint, the defendants and co-conspirators, for the pur-

pose of forming and effectuating the aforesaid combina-

tion and conspiracy, and in furtherance thereof, have

done, among other things, those acts which are alleged

in paragraph 15 of Count I hereof, the allegations of

which are realleged in this paragraph, with like effect

as if herein fully repeated.

26. The effects of the aforesaid combination and

conspiracy were that:

(a) Prices for concrete pipe throughout the

western area have been raised, fixed and main-

tained at high and artificial levels;

(b) Price competition in the sale of concrete

pipe throughout the western area has been re

strained, suppressed, and eliminated;

western area have been deprived of the benefits

of free competition in ‘the purchase of concrete

pipe; and

(d) Public agencies engaged in the construc

tion of systems to corfvey water and sewage it

cluding Federal governmental organizations such

as the Bureau of Reclamation and the United

—83—

States Army Corps of Engineers, have been forced

to pay high artificially fixed prices for concrete

Pipe. 3k.

27. Plaintiff had no knowledge of the said combi-

nation and conspiracy, or of any facts which might

have led to the discovery thereof until August 1960,

and it first became fully aware of the scope of. the

unlawful conspiracy during the course of the grand

jury proceedings which culminated in the return of

an indictment in this District against American and

United in March 1964. (United States v. American

Pipe and Construction Co. et al., Criminal No. 33338.)

It could not have uncovered the conspiracy at an earlier

date by the exercise of due diligence, inasmuch as the

unlawful conspiracy had been fraudulently concealed

by defendants.

28. Since at least 1954, plaintiff has purchased

substantial. quantities of concrete pipe from defendants

for use in the western area of the United States. In

purchasing said concrete Pipe, plaintiff in some instances

has invited formal, sealed competitive bids from pro-

spective suppliers, including defendants, and has gen-

erally accepted the price offered by the lowest respon-

sible bidder.

29. As a result of the illegal combination and con-

spiracy alleged herein, plaintiff has been led and in-

duced by defendants to make contract awards on bids

solicited by it during the period covered by this com-

plaint at prices fixed by said illegal combination and

conspiracy, and plaintiff has been denied thereby the

—84—

benefit of unrestricted competition in prices for con-

crete pipe. By the operation of defendants’ agreement

and concert of action herein alleged, plaintiff has been

compelled to pay substantially higher prices than would

have been the case but for the violation of the anti-

trust laws herein alleged.

30. Plaintiff has also purchased concrete pipe un-

der construction contracts with independent contrac-

tors who had purchased said concrete pipe from de

fendants at high, noncompetitive prices. By the oper-

ation of defendants’ agreements and concert of action

herein alleged, plaintiff has been compelled to pay sub-

stantially higher prices under said contracts than would

have been the case but for the violation of the anti-

trust laws herein alleged.

31. As a result of the illegal combination and con-

spiracy alleged herein, plaintiff United States of Amer-

ica has been injured and financially damaged by de-

fendants, in an amount which is presently undetermined.

WHEREFORE, the United States of America:

(a) Prays that the herein alleged combination

and conspiracy among defendants be adjudged and

decreed to be in unreasonable restraint of inter-

state trade and commerce and in violation of Sec-

tion 1 of the Sherman Act;

(b) Demands judgment against defendants for

the damages suffered by it due to defendants

violation of the antitrust laws, as provided for in

Section 4A of the Clayton Act (15 U.S.C. § 15A),

or some lesser amount to the extent that it has

—ss5—

recovery under Count I hereof, together with such

interest thereon as is permitted by law and the

costs of this suit; and

as the Court shall deem just.

Dated: June 23, 1964.

/s/ Robert F. Kennedy

ROBERT F. KENNEDY

Attorney General

/s/ William H. Orrick, Jr.

WILLIAM H. ORRICK, JR.

Assistant Attorney General

/s/ Harry G. Sklarsky

HARRY G. SKLARSKY

Attorney, Department of Justice

/s/ Francis C. Whelan .

FRANCIS C. WHELAN

United States Attorney

/s/ Stanley E. Disney

STANLEY E. DISNEY

Attorney, Department of Justice

/s/ Barbara J. Svedberg

BARBARA J. SVEDBERG

/s/ Donald J. Fallon

DONALD J. FALLON

Attorneys, Department of Justice

Filed June 23, 1964.

[Endorsement omitted in printing]

—~-86-—

Complaint.

United States District Court, Southern District of

California, Central Division.

United. States of America, Plaintiff, vs. Kaiser Stee]

Corporation and United States Steel Corporation, De-

fendants. Civil No. 64-833-PH.

The United States of America, plaintiff herein, by

its attorneys, brings this civil action against the above.

named defendants in two counts. As a first claim,

the United States of America, in its capacity as pur-

chaser of steel large diameter pressure pipe for use

by those Federal governmental organizations engaged

in the construction of systems to convey water and sew-

age throughout the Western Area of the United States,

brings this suit under the False Claims Act (31 U.S.C.

§§ 231-233) for double the amount of damages suf.

fered by it due to defendants’ acts, plus forfeitures

(Count I). Alternatively, the United States of America

in its aforesaid capacity as purchaser of steel large

diameter pressure pipe for use by Federal governmen-

tal organizations brings this suit under Section 4A of

the Clayton Act (15 U.S.C. § 15A) to recover its

actual damages (Count II). The plaintiff waives its

right of recovery under Counts I and II hereof for any

purchase for which it recovers damages under any

other complaint concerning related conspiracies, filed

by the plaintiff concurrently with the filing of this

complaint.

COUNT I

1. As a first claim, the United States of America

in its capacity as purchaser of steel large diameter pres-

sure pipe for use by those Federal governmental or-

ganizations engaged in the construction of systems to

_ =

convey water and sewage throughout the Western Area

of the United States, brings this suit under §§ 3490,

3491, 3492 and 5438 of the Revised Statutes (31

U.S.C. §§ 231-233), commonly known as the False

Claims Act.

2. Each of the defendants maintains an office,

transacts business and is found within the Southern

District of California.

3. Each of the corporations listed below is made

a defendant herein. Each of said corporations is or-

ganized and exists under the laws of the State indicated.

Each defendant is engaged in the business of manu-

facturing and of selling steel large diameter pressure

pipe principally at the place indicated in the Western

Area.

State of Principal Place

Name of Company Incorporation of Business

Kaiser Steel tion Nevada Oakland,

(Referred to in as California

Kaiser)

United States Steel Cor- New Jersey Commerce,

ion (Referred to California

as U.S. Steel)

4. Inasmuch as all defendants are corporations,

no defendant is in the military or naval forces of the

United States, or in the militia called into or actually

employed in the service of the United States.

5. The acts alleged in this complaint to have

been done by each of the defendants were authorized,

ordered, or done by the officers, agents, employees, or

representatives of each defendant while actively en-

gaged in the management, direction, or control of its

affairs.

6. Southwest Welding and Manufacturing Com-

pany (referred to herein as Southwest Welding) and

—33—

certain officers and employees of Southwest Welding

and of the corporate defendants participated as co.

conspirators in the combination and conspiracy herein.

after charged and have performed acts and made state.

ments in furtherance thereof.

7. As used herein, the term:

(a) “Steel large diameter pressure pipe,” re

ferred to herein as steel LDP pipe, means heavy

walled welded steel pipe which is manufactured

in diameters of over 24 inches and sold for the

conveyance of water or sewage under internal

pressures exceeding 115 feet of head or 50 pounds

per square inch;

(b) “Western Area” refers to California, Ore-

gon, Washington, Arizona, New Mexico, Utah,

Wyoming, Nevada, Idaho and Hawaii; and

chase and install or have installed steel LDP pipe

in systems primarily for the conveyance of water

or sewage under pressure.

8. Steel LDP pipe is used for the conveyance of

drinking water under pressure and for irrigation and

sanitation systems. The construction of systems utilizing

steel LDP pipe is often contracted for by the end user

with general contractors on the basis of sealed com-

petitive bids. Prior to submitting such bids, the general

contractors solicit quotations from pipe manufacturers

for the purchase price of the pipe delivered to the site

where the pipe is to be installed. Thus the pipe man-

ufacturer knows who the end user will be. The award-

winning contractor purchases the pipe from the low

quoting pipe manufacturer at the price quoted by the

latter and passes this price along to the end user. End

—39—

users also purchase pipe directly from pipe manufactur-

ers, usually on the basis of sealed competitive bids.

9. The corporate defendants are the principal man-

ufacturers of steel LDP pipe in the Western Area, and

during the period 1958 through 1961 their average an-

nual sales of steel LPD pipe in the Western Area were

at least $7,000,000. Because of the relatively limited

number of manufacturers of steel LDP pipe, general

contractors and end users frequently solicit bids for

said pipe from manufacturers outside the State where

said pipe is to be installed. Manufacturers of said pipe

usually manufacture the pipe for a particular job only

after receiving an order for it. Said- manufacturers cus-

tomarily identify each section of pipe so as to designate

its position in the pipe line and deliver or have de-

livered said pipe directly to the trench site or as near as

possible to the place where it will be installed. Dur-

ing the period of time covered by this complaint, the

defendants herein have manufactured substantial quan-

tities of steel LDP pipe at their plants within the West-

ern Area, and have sold, shipped, and delivered said

pipe to job sites outside the State where it was manu-

factured. Thus said steel LDP pipe moves in a con-

tinuous and uninterrupted flow from the place of man-

ufacture to points of installation outside the State where

said pipe was manufactured.

10. Steel LDP pipe is fabricated largely from steel

plate. The defendant manufacturers obtain said steel

plate in anticipation of orders or to enable them to fill

existing orders for steel LDP pipe. Substantial quan-

tities of said steel plate are produced outside the State

where said pipe is manufactured. The movement in

interstate commerce of the steel plate is necessary to

the manufacture and sale of steel LDP pipe by the

ssi ci

defendants in the Western Area, and the defendants

and co-conspirators are conduits through which said

steel plate flows in a continuous uninterrupted stream

in interstate commerce from the place where said steel

plate is produced to the place where it is incorporated

into steel LDP pipe and on to the final site where

said pipe is installed.

11. Any restraint upon free competition in the pro-

duction or sale of steel LDP pipe in the Western Area

necessarily and directly restrains and affects the inter-

state flow of steel LDP pipe and the steel plate used in

the construction of said pipe.

12. During the period covered by this complaint,

the plaintiff through its various executive departments

and agencies has purchased substantial quantities of

steel LDP pipe for use in the construction of systems

to convey water and sewage through the Western Area

of the United States. Plaintiff purchased some amounts

of the said steel LDP pipe pursuant to direct sealed

competitive bidding procedures and in accordance with

this practice and for the purpose of letting contracts,

it advertised and called for bids from pipe manv-

facturers, including defendants, seeking to supply steel

LDP pipe to plaintiff. Plaintiff has also purchased some

amounts of the said steel LDP pipe pursuant to direct

sealed competitive bidding procedures in accordance

with which it advertised and called for bids from gen-

eral contr seeking to construct systems to convey

water and for plaintiff. Said contractors in turn

solicited bids and quotations from the pipe manufactur-

ers, including defendants, for the steel LDP pipe to be

used in the said system. The bids or quotations tend-

ered by the pipe manufacturers to the contractors were

incorporated into the sealed bids submitted by the con-

niece

tractors to the plaintiff. The pipe manufacturers, includ-

ing defendants, knew that the bids or quotations

which they submitted to the contractor for the steel

LDP pipe would be thus incorporated into the bids

submitted by the contractor to the plaintiff, that the

price of said steel LDP pipe represented a substantial

portion of the entire bid submitted by the contractor to

the plaintiff and that said price would be paid by the

plaintiff, either directly to the pipe manufacturer or to

the contractor who in turn would pay said price to

the pipe manufacturer.

13. Beginning sometime prior to the year 1955 and

continuing thereafter until at least August. 1962, the

exact dates being to the plaintiff unknown, defendants,

together with the co-conspirators. knowingly combined,

conspired and agreed to defraud and. injure the United

States by obtaining or aiding to obtain the payment or

allowance of false or fraudulent claims under contracts

awarded them for the sale of steel LDP pipe during

said period.

14. The aforesaid combination and conspiracy has

consisted, among other things, of a continuing agree-

ment, understanding, and concert of action among the

defendants and co-conspirators to submit collusive and

rigged bids for the sale of steel LDP pipe and to allo-

cate and divide orders for the asia of steel LDP

pipe among themselves.

15. During the period of time covered by this com-

plaint, the defendants and the co-conspirators, for the

purpose of forming and effectuating the aforesaid com-

bination and conspiracy, and in furtherance thereof,

have done, among other things, the following:

(a) In 1955 several meetings were held at the

Statler Hilton and Sheraton-West hotels in Los An-

geles attended by P. M. Cobb and James Greer

Thompson of U.S. Steel; Ernest L. Illsley and

Homer Barnes of Kaiser; and Monte Lindmoe of

Southwest Welding. At these meetings an agreement

was reached which included the following terms:

(i) Sales of steel LDP pipe would be divided

so that U.S. Steel would obtain 38 per cent,

Kaiser 35 per cent, and Southwest Welding 27

per cent of the total of such sales;

(ii) Meetings would be held periodically be-

tween representatives of the three companies in

Los Angeles and San Francisco to discuss and

decide in advance which company would be en-

titled to submit the lowest bid on each major

job known to be scheduled for installation in

the near future;

(iii) Information would be exchanged regu-

larly between representatives of the three com-

panies to enable each participant to keep a rec-

ord of the amount of business secured by each

such participant. Tallies were kept by Herb

Thoedy in San Francisco and Norman David

Lindley in Los Angeles for U.S. Steel;

(iv) Before final bids or quotations were

submitted on each job of any importance, agree-

ment would be reached by representatives of the

participants on the dollar amount to be bid by

each participant;

(v) Bids would be submitted in such a way

as to create the semblance of competitive bid-

ding and pricing. ,

(b) The terms of this agreement were adhered

to by the defendants throughout the period of this

————

— 93

complaint, except that in 1961 Southwest Welding

was dissolved and U.S. Steel and Kaiser reallocat-

ed the business between themselves;

Monte Parker Lindmoe of Southwest Welding;

James Greer Thompson, Norman David Lindley,

and P. M. Cobb of U.S. Steel; and Homer A.

Barnes and Ernest L. Illsley of Kaiser to reach

agreement on dollar amounts to be bid on future

jobs.

16. Pursuant to said combination and conspiracy,

and as a result of the acts done in furtherance thereof,

defendants have been awarded contracts for the sale

of steel LDP pipe, and have received payments there-

under, on the basis of bids and quotations which they

submitted and which they falsely or fraudulently repre-

sented to be bona fide, independent, competitive, and

not the product of any collusion or agreement between

the bidders, and the prices of which bids they further

falsely or fraudulently represented to be normal, rea-

sonable and competitive whereas, in fact known to de-

fendants but unknown to plaintiff, the said bids sub-

mitted were sham and collusive and not the result of

open competition, and prices therefor were unreason-

able, arbitrary, and non-competitive.

17. With respect to each such contract awarded

for the supply of steel LDP pipe during the aforesaid

period of the conspiracy, the defendant to which such

contract was awarded presented and/or caused to be

presented to plaintiff for payment or approval by it

numerous claims, knowing such claims to be false,

fictitious, or fraudulent in that such claims were based

on a contract which had been falsely or fraudulently

procured by reason of the aforesaid bidding practices.

—994—

18. As a result of the presentment to it of the afore.

said false or fraudulent claims, and without knowledge

thereof, plaintiff has paid the false or fraudulent claims

to defendants or contractors to whom defendants sub-

mitted bids.

19. As a result of the illegal combination and con-

spiracy and the defendants’ acts in furtherance thereof,

plaintiff has been compelled to pay substantially higher

prices for steel LDP pipe than would have been the

case but for the illegal conduct complained of herein,

and has been financially damaged by defendants, the

amount of which is presently undetermined.

20. WHEREFORE, the United States of America:

(a) Demands judgment against defendants for

Two Thousand Dollars ($2,000) for the said con-

spiracy, for double the amount of the damages it

has sustained, and for such other forfeitures as

are allowable by law, as provided in Sections

3490, 3491, 3492 and 5438 of the Revised Stat-

utes (31 U.S.C. §§ 231-233) together with interest

thereon and the costs of this suit; and

(b) Prays that it recover such other amounts

and have such other and further relief as the Court

shall deem just.

COUNT II

21. As an alternative claim, the United States of

America, in its aforesaid capacity as purchaser of steel

LDP pipe for use by Federal governmental organiza-

tions, brings this suit against the defendants under Sec-

tion 4A of the Act of Congress of October 15, 1914,

c, 323, 38 Stat. 731, as amended (15 U.S.C. § 15A),

entitled “An Act to supplement existing laws against un-

lawful restraints and monopolies, and for other pur-

” commonly known as the Clayton Act, to recover

damages which it has sustained due to violations by de-

fendants of Section 1 of the Sherman Act (15 U.S.C.

§ 1).

22. Plaintiff realleges as part of this claim each and

all of the allegations contained in 49. 2, 3, and 5

through 11 of Count I hereof, with like effect as if herein

fully repeated.

23. Beginning prior to the year 1955 and continu-

ing thereafter until at least August 1962, defendants,

together with the co-conspirators, have engaged in a com-

bination and conspiracy in unreasonable restraint of

aforesaid interstate trade and commerce in steel LDP

pipe in the Western Area in violation of Section 1 of the

Sherman Act.

24. The aforesaid combination and conspiracy has

consisted of a continuing agreement, understanding, and

concert of action among the defendants and co-conspira-

tors to submit collusive and rigged bids for the sale of

steel LDP pipe and to allocate and divide orders for the

purchase of steel LDP pipe among themselves.

25. During the period of time covered by this com-

plaint, the defendants and co-conspirators for the pur-

pose of forming and effectuating the aforesaid combin-

ation and conspiracy, and in furtherance thereof, have

done, among other things, those acts which are alleged

in paragraph 15 of Count I hereof, the allegations of

which are realleged in this paragraph with like effect

as if herein fully repeated.

oe ae

26. The effects of the aforesaid combination and

conspiracy were that:

(a) Prices for steel LDP pipe throughout the

Western Area have been raised, fixed and main.

tained at high and artificial levels;

(b) Price competition in the sale of steel LDP

pipe throughout the Western Area has been re

strained, suppressed, and eliminated;

the Western Area have been deprived of the bene-

fits of free competition in the purchase of steel

LDP pipe; and

(d) Public agencies engaged in the construc-

tion of systems to convey water and sewage includ-

ing Federal governmental organizations such as

the Bureau of Reclamation and the United State/~

Army Corps of Engineers, have been forced to pay

high artificially fixed prices for steel LDP pipe.

27. Plaintiff had no knowledge of the said combina-

tion and conspiracy, or of any facts which might have

led to the discovery thereof until August 1960, and it

first became fully aware of the scope of the unlawful

conspiracy during the course of the grand jury proceed-

ings which culminated in the return of an indictment in

this District against Kaiser and United States Steel in

March 1964. (United States v. Kaiser Steel Corpora

tion et al., Criminal No. 33339). It could not have

uncovered the conspiracy at an earlier date by the exer-

cise of due diligence, inasmuch as the unlawful conspir-

acy had been fraudulently concealed by defendants.

28. Since at least 1955, plaintiff has purchased sub-

stantial quantities of steel LDP pipe from defendants

for use in the Western Area of the United States. In

purchasing said steel LDP pipe, plaintiff in some in

stances has invited formal, sealed competitive bids from

prospective suppliers, including defendants, and has

generally accepted the price offered by the lowest re-

sponsible bidder.

29. As a result of the illegal combination and con-

spiracy alleged herein, plaintiff has been led and in-

duced by defendants to make contract awards on bids

solicited by it during the period covered by this com-

plaint at prices fixed by said illegal combination and

conspiracy, and plaintiff has been denied thereby the

benefit of unrestricted competition in prices for steel

LDP pipe. By the operation of defendants’ agreement

and concert of action herein alleged, plaintiff has been

compelled to pay substantially higher prices than would

have been the case but for the violation of the antitrust

laws herein alleged.

30. Plaintiff has also purchased steel LDP pipe un-

der construction contracts with independent contractors

who had purchased said steel LDP pipe from defendants

at high, noncompetitive prices. By the operation of de-

fendants’ agreements and concert of action herein al-

leged, plaintiff has been compelled to pay substantially

higher prices under said contracts than would have

been the case but for the violations of the antitrust laws

herein alleged.

31. As a result of the illegal combination and con-

spiracy alleged herein, the plaintiff, United States of

America, has been injured and financially damaged

by defendants in an amount which is presently unde-

termined.

WHEREFORE, the United States of America:

(a) Prays that the herein alleged combination and

conspiracy among defendants be adjudged and decreed

to be in unreasonable restraint of interstate trade and

—93—

commerce and in violation of Section 1 of the Sherman

Act;

(b) Demands judgment against defendants for the

damages suffered by it due to defendants’ violation of

the antitrust laws, as provided for in Section 4A of the

Clayton Act (15 U.S.C. § 15A), or some lesser amount

to the extent that it has recovery under Count I hereof,

together with such interest thereon as is permitted by

law and the costs of this suit; and

Court shall deem just.

Dated: June 23, 1964

/s/ Robert F. Kennedy

ROBERT F. KENNEDY

Attorney General

/s/ William H. Orrick, Jr.

WILLIAM H. ORRICK, JR.

Assistant Attorney General

/s/ Harry G. Sklarsky

HARRY G. SKLARSKY

Attorney, Department of Justice

/s/ Francis C. Whelan

FRANCIS C. WHELAN

United States Attorney

/s/ Stanley E. Disney

STANLEY E. DISNEY

Attorney, Department of Justice

/s/ Barbara J. Svedberg

BARBARA J. SVEDBERG

/s/ Donald J. Fallon

DONALD J. FALLON

Attorneys, Department of Justice

Filed June 23, 1964.

[Endorsement omitted in printing]

—99-—

Complaint.

United States District Court, Southern District of

California, Central Division.

United States of America, Plaintiff, vs. United Con-

crete Pipe Corp.; American Pipe and Construction Co.;

Kaiser Steel Corporation; and United States Steel Cor-

poration, Defendants. Civil No. 64-834-CC.

The United States of America, plaintiff herein, by

its attorneys, brings this civil action against the above-

named defendants in two counts. As a first claim, the

United States of America, in its capacity as purchaser

of alternate large diameter pressure pipe for use by

those Federal governmental organizations engaged in

the construction of systems to convey water and sewage

throughout the western area of the United States, brings

this suit under the False Claims Act (31 U.S.C. §§231-

233) for double the amount of damages suffered by it

due to defendants’ acts, plus forfeitures (Count I).

Alternatively, the United States of America in its afore-

said capacity as purchaser of alternate large diameter

pressure pipe for use by Federal governmental organiza-

tions brings this suit under Section 4A of the Clayton

Act (15 U.S.C. § 15A) to recover its actual damages

(Count II). The plaintiff waives its right of recovery

under Counts I and II hereof for any purchase for

which it recovers damages under any other complaint

concerning related conspiracies, filed by the plaintiff

concurrently with the filing of this complaint.

Count I

1. As a first claim, the United States of America

in its capacity as purchaser of alternate large diameter

pressure pipe for use by those Federal governmental or-

ganizations engaged in the construction of systems to

—j100—

convey water and sewage throughout the western area

of the United States, brings this suit under 3490, 3491,

3492 and 5438 of the Revised Statutes (31 U.S.C.

§§ 231-233), commonly known as the False Claims

Act.

2. Each of the defendants maintains an office,

transacts business and is found within the Southern Dis-

trict of California. —

3. Each of the corporations listed below is made a

defendant herein. Each of said corporations is organized

and exists under the laws of the State indicated. Each

defendant is engaged in the business of manufacturing

and of selling alternate large diameter pressure pipe

principally in the city indicated in the western area.

State of i

Name of Company Incorporation of Business

United Concrete: Co. California Baldwin Park,

(Referred to eatin asl California

United) .

American Pipe and Con- California Monterey Park,

struction Co. (Referred California

to herein as American) .

Kaiser Steel ) Nevada Oakland,

(Referred to in as California

Kaiser)

United States Steel Cor- New Jersey Commerce,

ion (Referred to California

in as U.S. Steel)

4. Inasmuch as all defendants are corporations, no

defendant is in the military or naval forces of the

United States, or in the militia called into or actually

employed in the service of the United States.

5. The acts alleged in this complaint to have been

done by each of the defendants were authorized, or-

dered, or done by the officers, agents, employees, or

representatives of each defendant while actively en-

—

_—101—

gaged in the management, direction, or control of its

6. Southwest Welding and Manufacturing Company

(referred to herein as Southwest Welding), American

Concrete Pipe Co. of Phoenix, Arizona, (referred to

herein as American Concrete), Pipe Linings, Inc. and

certain officers and employees of said corporations and

of the corporate defendants participated as co-conspira-

tors in the combination and conspiracy hereinafter

charged and have performed acts and made statements-

in furtherance thereof.

7. As used herein, the term:

(a) “Steel large diameter pressure pipe,” or

steel LDP pipe means heavy walled welded steel

pipe which is manufactured in diameters of over

24 inches and sold for the conveyance of water or

sewage under internal pressures exceeding 115 feet

of head or 50 pounds per square inch;

(b) “Concrete large diameter pressure pipe,”

or concrete LDP pipe means concrete pressure

pipe, which ordinarily utilizes steel sheets or skelp

in its manufacture, in diameters over 24 inches,

sold for the conveyance of water and sewage

under internal pressures exceeding 115 feet of head

or 50 pounds per square inch;

or “alternate LDP pipe” means pipe which is

manufactured and sold, or offered for sale in jobs

where the specifications permit the use of either

concrete LDP pipe or steel LDP pipe;

(d) “Metal components” refers to steel plate,

sheets, skelp, rods, wires and mesh used in the

production of alternate LDP pipe.

—102—

(e) “Western area” refers to California, Ore.

gon, Washington, Arizona, New Mexico, Utah,

Wyoming, Nevada, Idaho and Hawaii; and

(f) “End users” means customers who pur-

chase and install or have installed alternate LDP

pipe in systems primarily for the conveyance of

water or sewage under pressure.

8. Alternate LDP pipe is used for the conveyance

of drinking water under pressure and for irrigation and

sanitation systems. The construction of systems utilizing

alternate LDP pipe is often contracted for by the end

user with general contractors on the basis of sealed

competitive bids. The end users draft or have drafted

the specifications where this is appropriate, so that

either concrete LDP pipe or steel LDP pipe can be

used in the system. Prior to submitting bids to the end

user, the general contractors solicit quotations from

pipe manufacturers for the purchase price of the pipe

delivered to the site where the pipe is to be installed.

Thus the pipe manufacturer knows who the end user

-will be. The award-winning contractor purchases the

pipe from the low quoting pipe manufacturer at the

price quoted by the latter and passes this price along

to the end user. End users also purchase pipe directly

from pipe manufacturers usually on the basis of sealed

competitive bids. The specifications for alternate LDP

pipe require that the pipe be lined and/or coated with

concrete. When the steel LDP pipe manufacturers

plan to submit bids or quotations on an alternate LDP

pipe job, they, in turn, solicit quotations or bids from

the concrete LDP pipe manufacturers for the perform-

ance of this service. The cost of this service is then

incorporated in the quotation or bid submitted to the

general contractors or end users by the steel LDP pipe

manufacturer.

—103—

9. The corporate defendants are the principal man-

ufacturers of alternate LDP pipe in the western area

and during the period 1958 through 1961 their average

annual sales of alternate LDP pipe in the western area

were at least $15,000,000. Because of the relatively

limited number of manufacturers of alternate LDP pipe,

general contractors and end users, where the specifi-

cations permit the use of alternate LDP pipe, frequently

solicit bids for said pipe from manufacturers outside

the State where said pipe is to be installed. Manufactur-

ers of said pipe usually manufacture the pipe for a

particular job only after receiving an order for it. Said

manufacturers customarily identify each section of pipe

so as to designate its position in the pipe line and deliver

or have delivered said pipe direct to the trench site or

as near as possible to the place where it will be installed.

During the period of time covered by this complaint,

the defendants herein have manufactured substantial

quantities of alternate LDP pipe at their plants within

the western area, and have sold, shipped, and deliv-

ered said pipe to job sites outside the State where it was

manufactured. Thus said alternate LDP pipe moves in a

continuous and uninterrupted flow from the place of

manufacture to points of installation outside the State

where said pipe was manufactured.

10. Substantial quantities of metal components

are used in the manufacture of alternate LDP pipe.

The defendant manufacturers often obtain said metal

components in anticipation of orders or to enable them

to fill existing orders for alternate LDP pipe. Substan-

tial quantities of the said metal components are pro-

duced outside the State where said pipe is manufac-

tured. The movement in interstate commerce of the

metal components is necessary to the manufacture and

—104—

sale of alternate LDP pipe by the defendants in the

western area and the defendants and co-conspirators

are conduits through which said metal components flow

in a continuous, uninterrupted stream in interstate com-

merce from the place where produced to the place

where it is incorporated into alternate LDP pipe and

on the final site where said pipe is installed.

11. Any restraint upon free competition in the

production or sale of alternate LDP pipe in the west-

ern area necessarily and directly restrains and affects

the interstate flow of alternate LDP pipe and the metal

components used in the manufacture of said pipe.

12. During the period covered by this complaint,

the plaintiff through its various executive departments

and agencies has purchased substantial quantities of

alternate LDP pipe for use in the construction of sys-

tems to convey water and sewage throughout the west-

ern area of the United States. Plaintiff purchased some

amounts of the said alternate LDP pipe pursuant to

direct sealed competitive bidding procedures and in

accordance with this practice and for the purpose of

letting contracts, it advertised and called for bids from

pipe manufacturers, including defendants, seeking to

supply alternate LDP pipe to plaintiff. Plaintiff has

alse purchased some amounts of the said alternate

LDP pipe pursuant to direct sealed competitive bid-

ding procedures in accordance with which it advertised

and called for bids from general contractors seeking to

construct systems to convey water and sewage for plain-

tiff. Said contractors in turn solicited bids and quota-

tions from the pipe manufacturers, including defend-

ants, for the alternate LDP pipe to be used in the said

system. The bids or quotations tendered by the pipe

manufacturers to the contractors were incorporated into

—105—

the sealed bids submitted by the contractors to the

plaintiff. The pipe manufacturers, including defend-

ants, knew that the bids or quotations which they sub-

mitted to the contractor for the alternate LDP pipe

would be thus incorporated into the bids submitted by

the contractor to the plaintiff, that the price of said al-

ternate LDP pipe represented a substantial portion of

the entire bid submitted by the contractor to the plain-

tiff and that said price would be paid by the plaintiff,

either directly to the pipe manufacturer or to the con-

tractor who, in turn, would pay said price to the pipe

manufacturer.

13. Beginning sometime prior to the year 1955 and

continuing thereafter until at least August 1962, the

exact dates being to the plaintiff unknown, defendants,

together with the co-conspirators, knowingly combined,

conspired and agreed to defraud and injure the United

States by obtaining or aiding to obtain the payment

or allowance of false or fraudulent claims under con-

tracts awarded them for the sale of alternate LDP pipe

during said period.

14. The aforesaid combination and conspiracy has

consisted, among other things, of a continuing agree-

ment, understanding, and concert of action among

the defendants and co-conspirators to submit collusive

and rigged bids for the sale of alternate LDP pipe

and to allocate and divide orders for the purchase of

alternate LDP pipe among themselves.

15. During the period of time covered by this com-

plaint, the defendants and the co-conspirators, for the

purpose of forming and effectuating the aforesaid com-

bination and conspiracy, and in furtherance thereof,

have done, among other things, the following:

—106— -

(a) In or about 1955, meetings were held be

tween P. M. Cobb and James Greer Thompson

of U.S. Steel; Emest L. Illsley and Homer

Barnes of Kaiser; Monte Lindmoe of Southwest

Welding; Lloyd R. Earl and Richard I. Young of

United; and Robert V. Edwards and Elliott E.

Brainard of American. At these meetings an

agreement was reached or reaffirmed which includ-

ed the following terms:

(i) that sales of alternate LDP pipe would

be divided so that 50 per cent of such sales

would be obtained by the manufacturers of con-

crete LDP pipe and 50 per cent would be ob-

tained by the manufacturers of steel LDP pipe

and that the amount of business involved in the

lining and coating of the alternate LDP pipe by

the concrete LDP pipe manufacturers would be

included in the share to be obtained by the con-

crete LDP pipe manufacturers;

(ii) that the steel LDP pipe manufacturers

would not install their own lining and coating

facilities but would rely on the concrete LDP

pipe manufacturers for this service;

(iii) that meetings would be held periodical-

ly between representatives of the steel LDP pipe

manufacturers group and concrete LDP pipe

manufacturers group in Los Angeles and San

Francisco to discuss and decide in advance

which group would be entitled to submit the

lowest bid on each major job known to be sched-

uled for installation in the near future;

(iv) that informatién would be exchanged

regularly between representatives of the con-

crete LDP pipe manufacturers and the steel

—107—

LDP pipe manufacturers to enable each group

to keep a record of the amount of business se-

cured by each;

(v) that bids would be submitted in such a

way as to create the semblance of competitive

bidding and pricing;

(b) Many phone calls were made between

James Greer Thompson, negotiator for the steel

LDP pipe manufacaturers and Elliott E. Brain-

ard, negotiator for the concrete LDP pipe manu-

facturers to reach agreement on which group

would submit the lowest bid on each job.

16. Pursuant to said combination and conspiracy,

and as a result of the acts done in furtherance thereof,

defendants have been awarded contracts for the sale of

alternate LDP pipe, and have received payments there-

under, on the basis of bids and quotations which they

submitted and which they falsely or fraudulently repre-

sented to be bona fide, independent, competitive, and

not the product of any collusion or agreement between

the bidders, and the prices of which bids they further

falsely or fraudulently represented to be normal, rea-

sonable and competitive whereas, in fact known to de-

fendants but unknown to plaintiff, the said bids sub-

mitted were sham and collusive and not the result of

open competition, and prices therefor were unreason-

able, arbitrary, and noncompetitive.

17. With respect to each such contract awarded

for the supply of alternate LDP pipe during the afore-

said period of the conspiracy, the defendant to which

such contract was awarded presented and/or caused to

be presented to plaintiff for payment or approval by it

numerous claims, knowing such claims to be false,

—108—

fictitious, or fraudulent in that such claims were based

on a contract which had been falsely or fraud

procured by reason of the aforesaid bidding practices,

18. Asa result of the presentment to it of the afore.

said false or fraudulent claims, and without knowledge

thereof, plaintiff has paid the false or fraudulent claims

to defendants or to contractors to whom defendants

submitted bids.

19. As a result of the illegal combination and con-

spiracy and the defendants’ acts in furtherance there.

of, plaintiff has been compelled to pay substantially

higher prices for alternate LDP pipe than would have

been the case but for the illegal conduct complained of

herein, and has. been financially damaged by defend.

ants, the amount of which is presently undetermined.

20. WHEREFORE, the United States of America:

(a) Demands judgment against defendants for

Two Thousand Dollars ($2,000.00) for the said

conspiracy, for double the amount of the damages

it has sustained, and for such other forfeitures as

are allowable by law, as provided in Sections

3490, 3491, 3492 and 5438 of the Revised

Statutes (31 U.S.C. §§ 231-233) together with in-

_ terest thereon and the costs of this suit; and

(b) Prays that it recover such other amounts

and have such other and further relief as the

Court shall deem just.

Count II

21. As an alternative claim, the United States of

America, in its aforesaid capacity as purchaser of alter-

nate LDP pipe for use by Federal governmental organ-

izations, brings this suit against the defendants under

—=§69——

Section 4A of the Act of Congress of October 15, 1914,

c. 323, 38 Stat. 731, as amended (15 U.S.C. § 15A),

entitled “An Act to supplement existing laws against un-

lawful restraints and monopolies, and for other pur-

poses,” commonly known as the Clayton Act, to recover

damages which it has sustained due to violations by

defendants of Section 1 of the Sherman Act (15 U.S.C.

§ 1).

22. Plaintiff realleges as part of this claim each and

all of the allegations contained in 2 and 3, and 5 through

11 of Count I hereof, with like effect as if herein fully

repeated.

23. Beginning prior to the year 1955 and continu-

ing thereafter until at least August 1962, defendants,

together with the co-conspirators have engaged in a

combination and conspiracy in unreasonable restraint

of interstate trade and commerce in alternate LDP pipe

in the western area, in violation of Section 1 of the Sher-

man Act (15'U.S.C. § 1).

24. The aforesaid combination and conspiracy has

consisted of a continuing agreement, understanding,

and concert of action among the defendants and co-

conspirators to submit collusive and rigged bids for

the sale of alternate LDP pipe and to allocate and

divide orders for the purchase of alternate LDP pipe

among themselves.

25. During the period of time covered by this com-

plaint, the defendants and co-conspirators, for the pur-

pose of forming and effectuating the aforesaid combi-

nation and conspiracy, and in furtherance thereof, have

done, among other things, those acts which are al-

leged in paragraph 15 of Count I hereof, the allega-

tions of which are realleged in this paragraph, with like

effect as if herein fully repeated.

—210—

26. The effects of the aforesaid combination 4

conspiracy were that:

(a) Prices for alternate LDP pipe throughout

the western area have been raised, fixed, and main.

tained at high and artificial levels;

(b) Price competition in the sale of alternate

LDP pipe throughout the western area has been

restrained, suppressed, and eliminated;

out the western area have been deprived of the

benefits of free competition in the purchase of al-

ternate LDP pipe; and

(d) Public agencies engaged in the construction

of systems to convey water and sewage, including

Federal governmental organizations such as the

Bureau of Reclamation and the United States Army

Corps of Engineers, have been forced to pay high

artificially fixed prices for alternate LDP pipe.

27. Plaintiff had no knowledge of the said combina-

tion and conspiracy, or of any facts which might have

led to the discovery thereof until August 1960, and it

first became fully aware of the scope of the unlawful

conspiracy during the course of the grand jury proceed-

ings which culminated in the return of an indictment in

this District against American, United, Kaiser, and U.S.

Steel in March 19

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